My recent post on Zillow and the winds of war led to some predictable responses. The automated bot-scripts posted about how Zillow sucks, the leads are terrible, and how Spencer’s gonna eat your baby, etc. etc., even though my post had nothing to do with any of that.
The principal objection of those who actually read the post was something along the lines of, “It’s great that Zillow’s catering to their highest paying customers, but that doesn’t mean they’re doing anything to raise the bar at all.”
Sam DeBord, who gets quoted in this blog a lot because (a) he’s thoughtful, (b) good-looking, and (c) often on the other side of these debates for me, wrote this as an example:
I dunno.. I think he’s a good-looking guy!
A pivot in strategy for profitability’s sake is commendable for business purposes. Let’s please not pretend that its intention is anything else
And yes, there are lots of other companies developing systems, training, and tools that improve agents’ ability to provide superior service. Kudos to Zillow on the intelligent strategy, but let’s save the humanitarian awards.
Elsewhere, like on the Facebook post where I sent semi-trolling, some of the more intelligent discussion focused on this issue, and I thought it worth laying it out in some detail, seeing as how the NAR Annual Conference just happened, without any major news on the Code of Excellence front. In fact, the news from NAR Annual is a bit… thin on the professional standards front.
Given that “Masses of Marginal Agents Destroy the Reputation” was cited as A1 on the D.A.N.G.E.R. Report, one might expect something with a bit more oomph. But hey, I wasn’t there, and I have no power besides. But then again, you’re here, and many of you do have power. So at least here in the corner of the Web, we might get down to some brass tacks on this issue.
The general question is this: What is to be done about the problem of marginal REALTORS?
A corollary question is: What exactly does “raising the bar” mean if it doesn’t mean getting rid of the marginal REALTORS who destroy the reputation of the good professionals?
Let’s get into it, with an actual example.
The Tale of Two Listings
Since the whole issue of “marginal REALTORS” gets all kind of confused when we speak in generalities, with the single biggest claim being that “high production doesn’t mean high service”, let’s actually get as specific as we possibly can.
I have written in the past about the problem of crappy listing photographs in the MLS. The problem is widespread enough that there’s a whole website called Bad MLS Photos dedicated to mocking them. But let’s get specific here. Since I’m not a REALTOR, I have no Code of Ethics provision prohibiting me from criticizing a REALTOR, and while I’m generally loath to bash anybody, I don’t see how it is possible to even have this discussion without… well… some sharp criticism. So let me say at the outset that I have no idea who these agents are, and the one I criticize might be a wonderful human being in every respect. The person is not the issue here; the work product is.
Let me show you two listings in my neighborhood of Katy, Texas. Both are Active at the time of writing.
As you can see, this is a 4BR/3.5BA single family home with the list price of $318,000. This is well above the median home price in Houston metro of $205,000 in October, and above the average home price of $271,648, according to HAR:
Now, note the Property Description:
Being sold as-is and priced below market to sell quickly. This house has a nice floor plan with lots of potential. Located on a culda-sac street within walking distance from the school. With a little TLC this house could be perfect for a family.
That’s the entirety of it. Now, look at some of the listing photographs:
Feel free to click over to the live listing on HAR.com and take a look at the 12 photographs there.
The listing agent is Rafael Flamenco, a dues-paying, full member in good standing of the Houston Association of REALTORS, and through that, of the Texas Association of REALTORS, and the National Association of REALTORS. Here’s his Profile Page on HAR.com:
We serve the entire Houston, Dallas, San Antonio and Austin real estate markets; from fine Inner Loop properties to master-planned communities. We are Texas’s foremost resource for master-planned communities and offer detailed information on smaller enclave communities. We have extensive information on all area schools and we can supply packets on most school districts. We represent our clients in both the purchase and sale of real estate. As licensed and experienced Agents/Realtors, we are committed to providing home buyers with professional buyer representation and home sellers with innovative marketing campaigns designed to insure a successful home sale. Our unmatched technical expertise, extensive market knowledge, and caring personal touch assure you the highest quality real estate service. [Emphasis added]
Presumably, Champions Real Estate Group does not think that the job done on 21515 Ivy Blossom Ln. represents “innovative marketing campaigns” or displays “unmatched technical expertise” or “caring personal touch”. I seriously doubt they would consider the above to be the “highest quality real estate service” for a family (or even an investor) who is selling their home for $318K.
Since the Description is cut off, let me reproduce it here:
The perfect 4 bedroom one story home with an open floor plan and a huge pool, heated spa with a green space and no neighbors behind. This home is well maintained with upgraded tile, brand new carpet in master bedroom (10/2015), new refinished pool deck(10/2015),new pool booster pumps(9/2014), new hot water heater and furnace (2014), 3 new solar attic fans(2015), and 2 brand new airconditioners (5/2015). Refrigerator included, and bathrooms have double sinks. Easy aacess to 1-10 and zoned to CRHS.
No, this isn’t exactly the greatest example of copywriting, or attention to detail. You have typos/mis-spellings, bad grammar, etc. But at the very least, the listing agent is providing some details about new carpet, new furnace, and so on.
Note that this is a 4BR/2BA with the list price of $270,000 — right in line with the average price, and above the median price, but cheaper than the $318,000 that 21515 Ivy Blossom Ln is asking for. The important point there is that the listing agent here, Karen Goodridge, stands to make less money from this property than Rafael Flamenco does with his listing. In fact, assuming 2.5% commission for both, Karen will make $1,200 less than Rafael will: $6,750 vs. $7,950.
But here are some listing photos from 1230 Ragsdale Ln:
It’s not close. It’s not even in the same universe as close. Either Ms. Goodridge is an accomplished photographer on her own right, or she paid a professional photographer to take these pictures — 32 of them in fact. If these rooms have not been professionally staged, then Ms. Goodridge has done a phenomenal job of cleanup and staging herself.
Here’s her profile page on HAR.com:
Once again, it’s not close. This is a professional REALTOR’s profile page. Again, Rafael Flamenco might be a great dad, a fantastic husband, and a super human being all around, but as a REALTOR, he’s not good.
Note that Karen Goodridge isn’t one of the super-agents, one of the Elite 100K, with 50 sales. Her profile indicates that she has two listings, and six “recently sold” transactions. Rafael, by the way, had five “recently sold” transactions. They’re comparable from a production standpoint.
Her brokerage is Keller Williams Premier Realty, which has 322 agents, and lest you think that the excellence of Karen’s work is somehow because of her broker (as in, perhaps KW Premier automatically sends professional photographers and stagers to all of the listings), take a look at 25231 Sterling Cloud Ln., listed by a KW Prermier agent, Eric Folkerts.
Both Rafael and Karen have the same MLS (HAR) and the same Association. They have access to the exact same tools and training available from both. (And by the way, HAR offers a discounted listing photo service to its members where 32 professional photos are $170.)
Now, one difference between Rafael and Karen is the brokerage.
Champions Real Estate Group is a 100% shop, with transaction fees only. KW’s model is pretty well-understood by everyone that could possibly be reading my blog, so I’ll just note that it isn’t exactly a high-split, high-service like some boutiques or even like “mainstream” brokerages like BHG Gary Greene or Coldwell Banker.
With all of that said…
What Do You Actually DO About Rafael?
I wanted to go through all of that detail above so we can get down to brass tacks about what can be done about Rafael. (Again, I don’t know the man, and he may be a great guy, but he’s a terrible agent.)
What exactly does it mean to “raise the bar” here?
One perspective (appears) to be that as long as companies, brokerages, Associations, MLSs, and Facebook Groups preach professionalism, and make tools available, that’s raising the bar. The problem is simply that Rafael hasn’t been talked to enough by enough people, and perhaps he just doesn’t know that taking crappy no-lights-on photographs on his cellphone is not an acceptable level of professionalism for an industry that prides itself on how it helps homeowners with the biggest asset they own: their family homes.
According to this perspective, HAR is raising the bar, because it provided Rafael with a great consumer website (HAR.com), with a Profile page, with tools and resources (like the 32 professional listing photos for $170), as well as a wealth of training classes and seminars and data and so on and so forth.
And yet, Rafael puts up that embarrassment to sell a $318,000 home — well above the average and median price of homes in Houston — for which he will be paid $7,950 should it close.
Sam DeBord’s point above, that there are many companies “developing systems, training, and tools that improve agents’ ability to provide superior service”, strikes me as utterly irrelevant when the plain logical conclusion has got to be that Rafael and others like him do a crappy job, not because these systems, training and tools do not exist, but because they don’t care.
I say that because Karen Goodridge exists. She’s not a made-up persona, but a real, live, working in-the-trenches REALTOR. She’s done a professional job with a listing that is cheaper than Rafael’s listing; she’s going to make $1,200 less than Rafael would. Yet, she’s done professional photography, and I’m willing to bet she’s done professional staging. She’s no super-agent, and I have no idea if she’s taking full advantage of all of these “systems, training, and tools” to improve her ability to provide superior service. But I’m willing to bet that she would, if she were aware of them, because she gives a damn.
But both Rafael and Karen are REALTORS in good standing. Their production levels are similar. From a consumer standpoint, they’re the same. And if I had my home listed by Rafael, then I assume that’s how Karen will be too. Hence:
So get down to brass tacks here. What do you DO about this problem? What does it mean to “raise the bar”?
Preaching at both Rafael, who plainly doesn’t give a crap, and at Karen, who does, is raising the bar? Rafael continues to list homes and represent buyers, in the biggest financial transaction of their lives. And this is acceptable because at least the industry is preaching at him?
Brokerage?
Is the problem here that Champions Real Estate Group is a 100%, transaction-only shop that provides zero oversight? That’s entirely possible.
HAR could provide all these tools, the companies Sam wants to extol provide systems and training and so on, but hey, the problem is that you have these brokers who don’t give a flying %&#$. So the problem is that the BROKER lies through his teeth when he says crap like “Our unmatched technical expertise, extensive market knowledge, and caring personal touch assure you the highest quality real estate service.”
Okay, then what do you DO about that? Preach at them some more, because what’s been missing for the past few decades is a lack of preaching? Is the issue that brokerages that don’t give a damn, who tell baldfaced lies about “highest quality real estate service” while providing zero oversight over the Rafaels of the world, are that way because they haven’t heard the message about how professionalism is important?
Note that Champions is a member of HAR, SABOR, ABOR, and METROTEX. Presumably, that means that the Broker has agreed in writing to abide by the Code of Ethics of NAR, because this is what HAR’s By-Laws says about becoming a Member of the Association:
B. Individuals who are actively engaged in the real estate profession other than as sole proprietors, partners, corporate officers, or branch office managers, in order to qualify for REALTOR® Membership, shall at the time of application, be associated either as an employee or as an independent contractor with a Designated REALTOR® Member of the Association or a Designated REALTOR® Member of another Association (if a Secondary Member) and maintain a current, valid Texas real estate broker’s or salesperson’s license or be licensed or certified by an appropriate state regulatory agency to engage in the appraisal of real property, shall complete, within 60 days of making application, a course of instruction covering the By-Laws and Rules and Regulations of the Association, the By-Laws of the State Association, and the Constitution and By-Laws and Code of Ethics of the NATIONAL ASSOCIATION OF REALTORS®, and shall agree in writing that if elected to membership they will abide by the Code of Ethics of the NATIONAL ASSOCIATION OF REALTORS®, and by the Constitution, By-Laws, and Rules and Regulations of the local Board, State Association, and the National Association. [Emphasis added]
Can we agree that Champions is in violation of the Code of Ethics, as well as the state law regarding Broker’s responsibility to provide oversight at least as far as Rafael and his awful listing is concerned?
And lest you think I’m picking on Champions, can we agree that Keller Williams Premier Realty is also in violation for the awfulness that is 25231 Sterling Cloud Ln., listed by a KW Prermier agent, Eric Folkerts? I guarantee you that if I chose to, I can find similarly awful examples from just about every large brokerage in HAR, in every single Association in the country.
Is this because the brokers and the office managers, most of whom are good people with good intentions who care about their brand, about customer service, about excellence, and about professionalism, have failed to do enough preaching and talking at the bad agents?
In Light of All This…
The problem of “marginal agents” who destroy the reputation of the good, hardworking professionals, has to be solved. Somehow, in some way, it has to be solved. NAR itself said as much via the DANGER Report.
As of today, the preferred “solution” seems to be MOAR PREACHING. Smart industry leaders want to claim that as long as companies are making systems, tools, and training available, that’s enough. What we need is more inspirational speeches, more Facebook “I Am a REALTOR” banners, and more aspirational Codes with no enforcement.
And when a company literally fires paying customers, that’s just selfish money-grubbing, because well, because Zillow!
Fine, let’s go along with that. Zillow is scum. They’re the devil. Everything they do is for the purpose of enriching the banksters and obeying the secret commands of the Bavarian Illuminati who meet in catacombs deep in the earth to drink the blood of newborn babes, while engaging in dog fighting Michael Vick style. Fine.
So what then is the non-Zillow, non-hateful, non-evil ACTION that is to be taken to deal with the Rafaels of the industry? If the brokerages are the problem, what is the non-evil ACTION that you recommend to deal with them?
Since, I, as someone who has never sold real estate, have NO idea as to what should be done, according to one popular view out there, and only licensed and active REALTORS can offer solutions, let me defer to your practical wisdom.
Brass tacks — what is to be DONE about Rafael?
Because I gotta tell you, MOAR PREACHING ain’t working.
Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.
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29 thoughts on “Brass Tacks: What To Do About Marginal REALTORS?”
ROB,
Feels like a trap…I’ll see if I can take the bait before the gate shuts 🙂
I know you used the proper disclaimers; not a Realtor, never met either of these agents…but, IMO presentation does not make the better broker/agent – their production does (yep, back to the money).
To keep it here in the real estate world, I’ve never seen an award going to the agent with the best photos, tag line, looks etc., recognition goes to the highest producers. The two agents in your piece produce about the same.
I doubt there is a broker-owner out there that would rule out Rafael over Karen simply for the presentations (that can be corrected, and of course Karen’s is better put together).
So, let’s assume presentation (photo’s, video, marketing platform) become standard?
Yep, we’ll come back to production.
Oh no, another trap – the consumer. Yes, they like pretty pictures and the rest. But, I think at the end of the day they want the agent that will produce – for them.
My thoughts anyway 🙂
Brian, as usual, spot on with your comments. There is no arguing the quality of the marketing, but the seller cares about getting the best price and terms for their sale and the management of all the elements if the transaction. Prettier pictures do not, in our world, mean a better broker when you consider the rest of the work being done in the course of the sale.
If Rafael sells his house at a higher price because he is a better negotiator, does that mean he cares? Does that mean he has raised the bar regardless of his less than high quality photos?
Just playing devil’s advocate–
I manage several Realtors like this and no matter what I lecture, they are frugal and are not paying the $160.00 for photography. Sellers use them for their negotiation tactics not their photography. Does not mean they do not care.
Melissa – the several Realtors like this who are “frugal” and won’t shell out $160 for photography… are they awesome, caring professionals you hold up as examples to emulate for the rest of your office?
Rob:
Absolutely not. I think professional photography is a baseline obligation of the real estate agent for his/her listings. I don’t understand an unwillingness to pay $160 for something that (i) presents your client’s property in the best possible light; and (ii) is a tiny fraction of the gross commission income you stand to earn on the sale of that property. With over 90% of buyers starting their search online, often before they ever have a real estate agent or a preapproval, you HAVE to have good pictures. If you don’t have compelling photos, people will just click right by your listing. But other commenters are correct, if the general public continues to use lazy, incompetent or unprofessional real estate agents, that chose to save $160 because that $160 is coming out of their pocket – well, those agents aren’t going to change.
I do think there is also a bigger role for brokers here. It makes me think of the Jerry McGuire Mission Statement: “Fewer clients. Better service.” But for our profession it should be “Fewer agents. Better service.” I think a brokerage that decides to go with fewer agents, but provides better service – maybe I’m naive, but I think they should be able to DOMINATE a market.
And frankly, IMHO you can’t call yourself a profession if you refuse to hold your members – agents and brokers – to professional standards.
MLS
Rob, some (most) of them are.
Most Realtors in my office use professional photographers because if the reasons listed by others.
I had no idea some commented under my post. I should check this blog more often for comments obviously!
As someone who also has never sold real estate as a profession, I’m confused. There seem to be only two outcomes for Rafael’s listing:
1. The listing agreement expires with almost no one touring the house. The seller loses some time, Rafael loses a chance at $7k and the sellers search around for a better agent who actually gets the home sold (probably for closer to market rate). The big loser here is the reputation of the real estate profession, though it might be redeemed if the next agent is any good. In this world, it seems like the only way to get rid of Rafael would be to have HAR rescind his license. Of course this would demand a bureaucratic process for complaints and appeals, etc. which would also cost more in dues.
2. The house somehow sells anyway. Rafael collects his $7k for his hour’s worth of work, and hard-working agents who care like Karen can only complain about how awful most of their colleagues are. In this world, the 6% commission is unconscionably high and we’d all be better off if everyone did FSBO.
What I want to know is: which world are we living in?
Once we know what’s really happening, there are ways to change the seller-finds-agent dynamic to make sure that no one choose Rafael in the first place.
There’s a third outcome:
3. The buyers who see the listing do not prioritize it, because the photos are awful and do not show the property in the best light possible. So only a few of them come to see it, fewer still put in an offer (if any), and Rafael’s client takes an offer that is lower than it could have been.
And that’s frankly the world we live in. Lack of professionalism doesn’t necessarily show up as “Rafael didn’t sell the house.” It shows up as “Rafael sold the house at $X” but since there’s no way to know what $X would have been had he been diligent and professional, no one can really say the client would have done better or not.
So we have comments like some on this post here, that you can’t judge Rafael by his crap work on the listing, since he might be a great negotiator or whatever. And in that case, this whole “raise the bar” thing is just cow patties.
My wife just commented on my comment with what I think is a great point.
If Rafael can produce the same revenue at Champion as Karen can at KW…is it not debatable that Rafael would do better than Karen if he were at KW?
Interesting…. 🙂
The answer to your question is, the free market, it will determine who survives as a RE Agent ,that concept is not seen much here but it works very well,Zillow is an example, but the market that created Z will force it to modify its practices or it will go out of business,I wish the same formula applied to nar and the ml’s,s.
Wow, well said. In the end, if our licensing real estate commission requires the agent (non-broker) to hang their shingle under the roof of a licensed Broker, one would think, hope and expect that Broker to be responsible for the actions or inactions of that agent. Period. If they truly did so, Brokers would then fulfil their duties to their agents and more importantly, the customers they serve. And the DOJ has not helped in this matter but that is another discussion. Until that day comes, the marginal among us will continue to muddy the reputation of is all and put the consumer at risk.
Christi – Can we go beyond “hope and expect” and go to “require and demand”?
Love your example. According to NAR Buyers and Sellers survey this year, 44% of buyers found the home they purchased on the Internet first. If this is true, then the single biggest marketing tool (in my opinion) is the photos and description (87% and 84% very useful respectively). Negotiating skills seem secondary if you can’t attract a buyer to the property.
SIDEBAR – some of the highest producers (teams and individuals) in our area have stated state & REALTOR fines are a cost of doing business.
I own a brokerage. We invested in an Exposio HDR camera, trained agents to use it, and charge them our cost to process ($1.50/saved photo). We have fired agents for poor ethics, we have no awards for production (private conversations only), and this year we are starting a customer service award based on Real Satisfied ratings.
All that said, we are not the biggest agency in the city (by a lot). I have competitors that have hired agents we’ve fired. We have teams that work harder to purchase leads from websites than servicing current customers and following up with them. Many GREAT agents in our city super serve their clients, some of the top producers do not.
Brokers can make a WORLD of difference. Most of us want to do a good job. Flat fee brokers managing hundreds of agents probably won’t influence agents to do a great job. Bu in your example (KW), neither do high touch companies make all the difference either. A lot of it comes down to the individual leader.
But here’s a thought: Zillow is perpetuating the problem catering to agents who can spend the most money. EXACTLY what a lot of brokerages do. Reward production, cater to those who pay the bills, bend rules as a cost of business.
Other industries embraced customer satisfaction (JD Powers has been producing Automobile Customer Satisfaction Index for years). As an industry, we’ve only RECENTLY had agent rating tools and display ratings, and many of them STILL use units/dollars as a major part of those ratings. When the consumer starts embracing quality over quantity, then perhaps our industry leaders will worry more about their reputation as a way to earn market share over bigger advertising budgets and agent count.
And for the Nay Sayers – each of you knows someone in your market making BIG BUCKS that has constant consumer complaints….
Do we base an entire career on the marketing skills of an agent? Aren’t there more things involved than simply what viewers would see in a listing posted to MLS?
There are all sorts of things that actually happen when you take a listing. As an example; This could be a divorce sale and may have a structured pricing program that was agreed to by both parties that mandated a higher price to begin with (I’ve had many of those over the years).
To consider Rafael a “terrible Realtor” does not consider that he may choose to work those challenging divorce/estate sales; he may be a tremendous negotiator; he may knock on every door in a community looking for someone who may consider selling because he truly has a buyer wanting that particular neighborhood. None of these types of things can be seen from his listing.
What can be seen is his improper reference to “being perfect for a family” – that is a BIG NO-NO!
I’d say the far bigger issue than marketing skills is the IGNORANCE of laws; the lack of CHARACTER (outright lying); and the SLOTHFULL work ethic of my fellow NAR members. In my market of 12,000+ Realtors, I think a fair estimate at least 70% would never be considered for joining my team.
My solution for thinning the herd is to raise the costs of entry; impose standards and FINES to the BROKER that is employing the agent; and to impose mandatory “in person” hours of training that you can’t avoid being present for.
None of which is likely to ever be implemented for the same reasons that you noted in your prior article – NAR relies on the masses to generate revenue, and with no real penalty to Brokers who employ the bottom tier of agents with little, to no oversight – our numbers are likely to swell even larger.
There is a way to solve it and it has nothing to do with NAR or realtors. It involved educating home sellers. With the info freely available on line today home sellers can do the same analysis you did and decide for themselves who the good and bad realtors are. They just need to be shown the way…by a non realtor.
Can you expand on that, Carl? Shown the way by a non-Realtor how?
This is a post I wrote a month ago about how to change the profession and eliminate the untrained and incompetent agents. It doesn’t help with the unethical and unprofessional ones, but I think it could be a start. Short version: Higher barriers to entry and mandatory apprenticeships.
Short version: Higher barriers to entry and mandatory apprenticeships.
Oh Melissa – You are soooo right!
My experience is not a positive one with agents like Rafeal….In general agents like him are difficult to work with and their success depends on solid agents who bring a buyer to the transaction. That (buyer) agent does all the work to get it done and his listing is SOLD. His strength in my opinion is in his listing presentation. All talk and no action! The unsuspecting seller signs a no holds barred listing contract for 6 months…….. The Mike Ferry way “quantity over quality”…I literally feel sick to my stomach when I have to show listings belonging to a low caring agent. Believe me there is not a lot of referral or repeat business for these agents.
So standards. One could say it is a lll about delivering a “higher standard of customer care”, but that declaration also lacks the one important criteria of a standard and that is all about the measurement of experience, what has actually been done to list and sell anything. There are only three ways to increase the industry’s standards. One, make it tougher to get licensed (BRE), two, select out of the ranks those that have actually done something (NAR), and three, brokers refuse to let people “practice real estate on humans” that have not been thoroughly “apprenticed” in the trade. Other than that folks the bar has been set currently at get a license, fog a mirror (actually optional because that involves a measurement of doing something), promise to play nice in the industry sandbox and let her fly! Sad. True. And as it relates to what the consumer thinks of REALTORs, embarrassingly despicable.
I’d be firing me some Rafael the minute I saw those slopped up pictures. If Rafael wants to be frugal and not hire professional photography then he needs to learn how to work his own camera.
I agree Matthew. In our office the top producers are the ones who take the time and put together the best presentations of their listing. They all realize that the best marketing produces the best results. I cringe when I look at other listing agent’s pictures that look like they were taking with a Polaroid from 1980.
Rob,
Another thought-provoking and fine post. This has been a concern of mine for more than a few years and way before the DANGER report came out. I have even mentioned this at our Board of Directors meetings in our local Association.
Firstly: I think I know the enemy and it is us. N.A.R. won’t do anything because they run scared from the Justice Department which by the way, has spent way to much time and misdirected energy on our industry. We can’t even keep thieves and sexual predators from being members, how the hell are we going to kick someone out because they do a very bad job at being a professional?
Secondly: For all the brokers out there who train, coach and cheer on their agents and let the marginal ones go, there’s some internet company willing to hire them. Shoot, there’s even plenty of brick and mortar companies who will hire them.
The answer: We must police ourselves and accountability is the only way to do it. I would humbly propose that we have a two-tier system: apprentice and professional. To move beyond the apprentice stage one would have to do a specific number of transactions in a 12 month period and demonstrate the ability to deliver top notch service to their clients with letters of recommendation from their BIC and solid evidence that they know what they’re doing. Overpriced listings, poor photographs, incorrect or missing information and you stay (or fall back) to apprentice.
Just a few bits for you to chew on…..
I think we all get it. A nice presentation, whether on the Internet or at the coffee table, is just better than a less attractive one.
It seems what’s really happening here is that we’re trying to drill down to find what separates a “good agent” from a not-so-good agent.
That attribute, in my opinion is market knowledge. I’m not sure there is a high producing agent that is not almost obsessive about the market they serve. That obsession builds a knowledge that separates the good from the not-so-good.
So, IMO, once the presentation (the template that becomes a quasi standard, i.e. input photo here, fill in this blank, offer up some commentary) becomes more normalized…it will be discovered that market knowledge is the great differentiator in the agent world (those that are actually on the ground floor of this business already know this) .
The problem that I think is trying to solved – how can good agents be distinguished from the not-so-good? Once everyone uses the same camera – market knowledge and that agents resulting higher production will Trump (had to throw that in :)) every other attribute that some may be trying to discover (i.e. how can we rate an agent etc.).
Assuming that’s what is really being asked here, which I believe it is….all the different rating formulas, other than pure revenue production won’t help those looking to find or rate agents an easy project.
Market knowledge = higher production = the better agent.
Maybe Rafael knows his market better than Karen. If he does, the customers will, over time, prefer Rafael.
Sorry if I got off topic…just had to spit it out 🙂
Thanks,
Brian
No one comments on my comments better (more) than I do… 🙂
I’ll leave after this, I promise.
“The problem of “marginal agents” who destroy the reputation of the good, hardworking professionals, has to be solved”.
How?
Here’s a thought. After the mandatory CE is under the belt, ask your agents to take this test:
Mr./Ms Agent –
1. List your top 5 favorite listings in the market today and why?
2. What traded in the market recently that seemed outside the context of the current market and why?
3. What sold recently that you think was the best value and why?
4. Which elementary school market garners the most demand and why?
You get the idea. If Karen or Rafael can’t answer those questions then IMO their communication, negotiation, competency (whatever that is), customer service rating and experience are moot.
Have a nice holiday 🙂
Brian
The only possible blessing here is that Raphael’s photos are so bad that Zillow and other portals will never invoke their “right of perpetual use” for such a poor representation of this property. If photos are so important why is there not a hue and cry from the industry to protect these precious intellectual property assets? Have a look at http://www.fotag.io . These guys represent an industry disruptor, but who really gives a damn about the pictures?
The be-all and end all is not with NAR or state assocations, or with REC. It is with the broker. If brokers would police their agents and listing marketing, and live up to the code of ethics then this would all be a moot point.
The problem is that both those agents produce revenue for their brokers, and so the brokers need a REASON to fire them. If they pay the dues and desk fees and splits what broker will terminate them? In a world where head count matters this is the issue.
I terminated an agent because she did not live up to our standards of business. She could not be found, did not do what she promised she would do, and while she brought in listings they were overpriced, not staged and the photos were terrible. Guess what? Within the week another broker picked her up quickly. Her listings all chose to stay with us, were re-photographed and staged immediately and will be treated with our high standard of care. If brokers had standards, and policed their ranks, we would not have this discussion.
But it is too often all about head count. Managers of offices must recruit, and must bring in the numbers. Rather than lose an agent they will put up with unethical behavior and half ass salespeople. Until brokers say they have had enough, it will not change. Agents can be legal, yet not ethical. That distinction is important. Taking an overpriced listing and not utilizing tools at your disposal to sell a property is unethical. It is however not illegal. When brokers start walking the true line of the code of ethics, and supervising their agents and being hands on, only then will we hope to see true change.
29 thoughts on “Brass Tacks: What To Do About Marginal REALTORS?”
ROB,
Feels like a trap…I’ll see if I can take the bait before the gate shuts 🙂
I know you used the proper disclaimers; not a Realtor, never met either of these agents…but, IMO presentation does not make the better broker/agent – their production does (yep, back to the money).
To keep it here in the real estate world, I’ve never seen an award going to the agent with the best photos, tag line, looks etc., recognition goes to the highest producers. The two agents in your piece produce about the same.
I doubt there is a broker-owner out there that would rule out Rafael over Karen simply for the presentations (that can be corrected, and of course Karen’s is better put together).
So, let’s assume presentation (photo’s, video, marketing platform) become standard?
Yep, we’ll come back to production.
Oh no, another trap – the consumer. Yes, they like pretty pictures and the rest. But, I think at the end of the day they want the agent that will produce – for them.
My thoughts anyway 🙂
Brian, as usual, spot on with your comments. There is no arguing the quality of the marketing, but the seller cares about getting the best price and terms for their sale and the management of all the elements if the transaction. Prettier pictures do not, in our world, mean a better broker when you consider the rest of the work being done in the course of the sale.
If Rafael sells his house at a higher price because he is a better negotiator, does that mean he cares? Does that mean he has raised the bar regardless of his less than high quality photos?
Just playing devil’s advocate–
I manage several Realtors like this and no matter what I lecture, they are frugal and are not paying the $160.00 for photography. Sellers use them for their negotiation tactics not their photography. Does not mean they do not care.
Melissa – the several Realtors like this who are “frugal” and won’t shell out $160 for photography… are they awesome, caring professionals you hold up as examples to emulate for the rest of your office?
Rob:
Absolutely not. I think professional photography is a baseline obligation of the real estate agent for his/her listings. I don’t understand an unwillingness to pay $160 for something that (i) presents your client’s property in the best possible light; and (ii) is a tiny fraction of the gross commission income you stand to earn on the sale of that property. With over 90% of buyers starting their search online, often before they ever have a real estate agent or a preapproval, you HAVE to have good pictures. If you don’t have compelling photos, people will just click right by your listing. But other commenters are correct, if the general public continues to use lazy, incompetent or unprofessional real estate agents, that chose to save $160 because that $160 is coming out of their pocket – well, those agents aren’t going to change.
I do think there is also a bigger role for brokers here. It makes me think of the Jerry McGuire Mission Statement: “Fewer clients. Better service.” But for our profession it should be “Fewer agents. Better service.” I think a brokerage that decides to go with fewer agents, but provides better service – maybe I’m naive, but I think they should be able to DOMINATE a market.
And frankly, IMHO you can’t call yourself a profession if you refuse to hold your members – agents and brokers – to professional standards.
MLS
Rob, some (most) of them are.
Most Realtors in my office use professional photographers because if the reasons listed by others.
I had no idea some commented under my post. I should check this blog more often for comments obviously!
As someone who also has never sold real estate as a profession, I’m confused. There seem to be only two outcomes for Rafael’s listing:
1. The listing agreement expires with almost no one touring the house. The seller loses some time, Rafael loses a chance at $7k and the sellers search around for a better agent who actually gets the home sold (probably for closer to market rate). The big loser here is the reputation of the real estate profession, though it might be redeemed if the next agent is any good. In this world, it seems like the only way to get rid of Rafael would be to have HAR rescind his license. Of course this would demand a bureaucratic process for complaints and appeals, etc. which would also cost more in dues.
2. The house somehow sells anyway. Rafael collects his $7k for his hour’s worth of work, and hard-working agents who care like Karen can only complain about how awful most of their colleagues are. In this world, the 6% commission is unconscionably high and we’d all be better off if everyone did FSBO.
What I want to know is: which world are we living in?
Once we know what’s really happening, there are ways to change the seller-finds-agent dynamic to make sure that no one choose Rafael in the first place.
There’s a third outcome:
3. The buyers who see the listing do not prioritize it, because the photos are awful and do not show the property in the best light possible. So only a few of them come to see it, fewer still put in an offer (if any), and Rafael’s client takes an offer that is lower than it could have been.
And that’s frankly the world we live in. Lack of professionalism doesn’t necessarily show up as “Rafael didn’t sell the house.” It shows up as “Rafael sold the house at $X” but since there’s no way to know what $X would have been had he been diligent and professional, no one can really say the client would have done better or not.
So we have comments like some on this post here, that you can’t judge Rafael by his crap work on the listing, since he might be a great negotiator or whatever. And in that case, this whole “raise the bar” thing is just cow patties.
My wife just commented on my comment with what I think is a great point.
If Rafael can produce the same revenue at Champion as Karen can at KW…is it not debatable that Rafael would do better than Karen if he were at KW?
Interesting…. 🙂
The answer to your question is, the free market, it will determine who survives as a RE Agent ,that concept is not seen much here but it works very well,Zillow is an example, but the market that created Z will force it to modify its practices or it will go out of business,I wish the same formula applied to nar and the ml’s,s.
Wow, well said. In the end, if our licensing real estate commission requires the agent (non-broker) to hang their shingle under the roof of a licensed Broker, one would think, hope and expect that Broker to be responsible for the actions or inactions of that agent. Period. If they truly did so, Brokers would then fulfil their duties to their agents and more importantly, the customers they serve. And the DOJ has not helped in this matter but that is another discussion. Until that day comes, the marginal among us will continue to muddy the reputation of is all and put the consumer at risk.
Christi – Can we go beyond “hope and expect” and go to “require and demand”?
Love your example. According to NAR Buyers and Sellers survey this year, 44% of buyers found the home they purchased on the Internet first. If this is true, then the single biggest marketing tool (in my opinion) is the photos and description (87% and 84% very useful respectively). Negotiating skills seem secondary if you can’t attract a buyer to the property.
SIDEBAR – some of the highest producers (teams and individuals) in our area have stated state & REALTOR fines are a cost of doing business.
I own a brokerage. We invested in an Exposio HDR camera, trained agents to use it, and charge them our cost to process ($1.50/saved photo). We have fired agents for poor ethics, we have no awards for production (private conversations only), and this year we are starting a customer service award based on Real Satisfied ratings.
All that said, we are not the biggest agency in the city (by a lot). I have competitors that have hired agents we’ve fired. We have teams that work harder to purchase leads from websites than servicing current customers and following up with them. Many GREAT agents in our city super serve their clients, some of the top producers do not.
Brokers can make a WORLD of difference. Most of us want to do a good job. Flat fee brokers managing hundreds of agents probably won’t influence agents to do a great job. Bu in your example (KW), neither do high touch companies make all the difference either. A lot of it comes down to the individual leader.
But here’s a thought: Zillow is perpetuating the problem catering to agents who can spend the most money. EXACTLY what a lot of brokerages do. Reward production, cater to those who pay the bills, bend rules as a cost of business.
Other industries embraced customer satisfaction (JD Powers has been producing Automobile Customer Satisfaction Index for years). As an industry, we’ve only RECENTLY had agent rating tools and display ratings, and many of them STILL use units/dollars as a major part of those ratings. When the consumer starts embracing quality over quantity, then perhaps our industry leaders will worry more about their reputation as a way to earn market share over bigger advertising budgets and agent count.
And for the Nay Sayers – each of you knows someone in your market making BIG BUCKS that has constant consumer complaints….
Do we base an entire career on the marketing skills of an agent? Aren’t there more things involved than simply what viewers would see in a listing posted to MLS?
There are all sorts of things that actually happen when you take a listing. As an example; This could be a divorce sale and may have a structured pricing program that was agreed to by both parties that mandated a higher price to begin with (I’ve had many of those over the years).
To consider Rafael a “terrible Realtor” does not consider that he may choose to work those challenging divorce/estate sales; he may be a tremendous negotiator; he may knock on every door in a community looking for someone who may consider selling because he truly has a buyer wanting that particular neighborhood. None of these types of things can be seen from his listing.
What can be seen is his improper reference to “being perfect for a family” – that is a BIG NO-NO!
I’d say the far bigger issue than marketing skills is the IGNORANCE of laws; the lack of CHARACTER (outright lying); and the SLOTHFULL work ethic of my fellow NAR members. In my market of 12,000+ Realtors, I think a fair estimate at least 70% would never be considered for joining my team.
My solution for thinning the herd is to raise the costs of entry; impose standards and FINES to the BROKER that is employing the agent; and to impose mandatory “in person” hours of training that you can’t avoid being present for.
None of which is likely to ever be implemented for the same reasons that you noted in your prior article – NAR relies on the masses to generate revenue, and with no real penalty to Brokers who employ the bottom tier of agents with little, to no oversight – our numbers are likely to swell even larger.
There is a way to solve it and it has nothing to do with NAR or realtors. It involved educating home sellers. With the info freely available on line today home sellers can do the same analysis you did and decide for themselves who the good and bad realtors are. They just need to be shown the way…by a non realtor.
Can you expand on that, Carl? Shown the way by a non-Realtor how?
This is a post I wrote a month ago about how to change the profession and eliminate the untrained and incompetent agents. It doesn’t help with the unethical and unprofessional ones, but I think it could be a start. Short version: Higher barriers to entry and mandatory apprenticeships.
http://melissasavenko.strikingly.com/blog/a-proposed-solution-to-the-problem-of-incompetent-real-estate-ag
Short version: Higher barriers to entry and mandatory apprenticeships.
Oh Melissa – You are soooo right!
My experience is not a positive one with agents like Rafeal….In general agents like him are difficult to work with and their success depends on solid agents who bring a buyer to the transaction. That (buyer) agent does all the work to get it done and his listing is SOLD. His strength in my opinion is in his listing presentation. All talk and no action! The unsuspecting seller signs a no holds barred listing contract for 6 months…….. The Mike Ferry way “quantity over quality”…I literally feel sick to my stomach when I have to show listings belonging to a low caring agent. Believe me there is not a lot of referral or repeat business for these agents.
So standards. One could say it is a lll about delivering a “higher standard of customer care”, but that declaration also lacks the one important criteria of a standard and that is all about the measurement of experience, what has actually been done to list and sell anything. There are only three ways to increase the industry’s standards. One, make it tougher to get licensed (BRE), two, select out of the ranks those that have actually done something (NAR), and three, brokers refuse to let people “practice real estate on humans” that have not been thoroughly “apprenticed” in the trade. Other than that folks the bar has been set currently at get a license, fog a mirror (actually optional because that involves a measurement of doing something), promise to play nice in the industry sandbox and let her fly! Sad. True. And as it relates to what the consumer thinks of REALTORs, embarrassingly despicable.
I’d be firing me some Rafael the minute I saw those slopped up pictures. If Rafael wants to be frugal and not hire professional photography then he needs to learn how to work his own camera.
I agree Matthew. In our office the top producers are the ones who take the time and put together the best presentations of their listing. They all realize that the best marketing produces the best results. I cringe when I look at other listing agent’s pictures that look like they were taking with a Polaroid from 1980.
Rob,
Another thought-provoking and fine post. This has been a concern of mine for more than a few years and way before the DANGER report came out. I have even mentioned this at our Board of Directors meetings in our local Association.
Firstly: I think I know the enemy and it is us. N.A.R. won’t do anything because they run scared from the Justice Department which by the way, has spent way to much time and misdirected energy on our industry. We can’t even keep thieves and sexual predators from being members, how the hell are we going to kick someone out because they do a very bad job at being a professional?
Secondly: For all the brokers out there who train, coach and cheer on their agents and let the marginal ones go, there’s some internet company willing to hire them. Shoot, there’s even plenty of brick and mortar companies who will hire them.
The answer: We must police ourselves and accountability is the only way to do it. I would humbly propose that we have a two-tier system: apprentice and professional. To move beyond the apprentice stage one would have to do a specific number of transactions in a 12 month period and demonstrate the ability to deliver top notch service to their clients with letters of recommendation from their BIC and solid evidence that they know what they’re doing. Overpriced listings, poor photographs, incorrect or missing information and you stay (or fall back) to apprentice.
Just a few bits for you to chew on…..
I think we all get it. A nice presentation, whether on the Internet or at the coffee table, is just better than a less attractive one.
It seems what’s really happening here is that we’re trying to drill down to find what separates a “good agent” from a not-so-good agent.
That attribute, in my opinion is market knowledge. I’m not sure there is a high producing agent that is not almost obsessive about the market they serve. That obsession builds a knowledge that separates the good from the not-so-good.
So, IMO, once the presentation (the template that becomes a quasi standard, i.e. input photo here, fill in this blank, offer up some commentary) becomes more normalized…it will be discovered that market knowledge is the great differentiator in the agent world (those that are actually on the ground floor of this business already know this) .
The problem that I think is trying to solved – how can good agents be distinguished from the not-so-good? Once everyone uses the same camera – market knowledge and that agents resulting higher production will Trump (had to throw that in :)) every other attribute that some may be trying to discover (i.e. how can we rate an agent etc.).
Assuming that’s what is really being asked here, which I believe it is….all the different rating formulas, other than pure revenue production won’t help those looking to find or rate agents an easy project.
Market knowledge = higher production = the better agent.
Maybe Rafael knows his market better than Karen. If he does, the customers will, over time, prefer Rafael.
Sorry if I got off topic…just had to spit it out 🙂
Thanks,
Brian
No one comments on my comments better (more) than I do… 🙂
I’ll leave after this, I promise.
“The problem of “marginal agents” who destroy the reputation of the good, hardworking professionals, has to be solved”.
How?
Here’s a thought. After the mandatory CE is under the belt, ask your agents to take this test:
Mr./Ms Agent –
1. List your top 5 favorite listings in the market today and why?
2. What traded in the market recently that seemed outside the context of the current market and why?
3. What sold recently that you think was the best value and why?
4. Which elementary school market garners the most demand and why?
You get the idea. If Karen or Rafael can’t answer those questions then IMO their communication, negotiation, competency (whatever that is), customer service rating and experience are moot.
Have a nice holiday 🙂
Brian
The only possible blessing here is that Raphael’s photos are so bad that Zillow and other portals will never invoke their “right of perpetual use” for such a poor representation of this property. If photos are so important why is there not a hue and cry from the industry to protect these precious intellectual property assets? Have a look at http://www.fotag.io . These guys represent an industry disruptor, but who really gives a damn about the pictures?
The be-all and end all is not with NAR or state assocations, or with REC. It is with the broker. If brokers would police their agents and listing marketing, and live up to the code of ethics then this would all be a moot point.
The problem is that both those agents produce revenue for their brokers, and so the brokers need a REASON to fire them. If they pay the dues and desk fees and splits what broker will terminate them? In a world where head count matters this is the issue.
I terminated an agent because she did not live up to our standards of business. She could not be found, did not do what she promised she would do, and while she brought in listings they were overpriced, not staged and the photos were terrible. Guess what? Within the week another broker picked her up quickly. Her listings all chose to stay with us, were re-photographed and staged immediately and will be treated with our high standard of care. If brokers had standards, and policed their ranks, we would not have this discussion.
But it is too often all about head count. Managers of offices must recruit, and must bring in the numbers. Rather than lose an agent they will put up with unethical behavior and half ass salespeople. Until brokers say they have had enough, it will not change. Agents can be legal, yet not ethical. That distinction is important. Taking an overpriced listing and not utilizing tools at your disposal to sell a property is unethical. It is however not illegal. When brokers start walking the true line of the code of ethics, and supervising their agents and being hands on, only then will we hope to see true change.
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