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NAR Mission: To be the gatekeepers of listings, and protectors of commissions.*

Recently I stumbled upon a group of user reviews for Redfin.com. What was most interesting about the reviews was not the opinions expressed of Redfin, but of traditional real estate agents.

Here are a few of the choice comments:

"For me a real estate agent is like one of those disposable plastic rain coats. Just something you buy because it is raining and you need it right then and there, convenient but overpriced and you throw it away after you are done."

"In good conscience, I can't support an industry where the lousiest agent routinely makes more money annually than the best high school teacher in Seattle."

"A huge benefit to listing with a large company like Windermere is the inherent nepotism between listing and buyers' agents. Buyer agents have a wealth of listings to push on their clients..."

"The last thing that should be stated, in the completion of the 'caveat emptor' discussion, is that Redfin listings are actively shunned by agents from other companies."

"Anything that Redfin can do to break the lock that the MLS and Realtor scammers have on the real estate market is a good thing. Go Redfin."

It is clear to me that real estate agents have a public opinion problem. I believe that the reason we have a problem is because we have done a terrible job at communicating our value proposition to the world.

We have been so focused on protecting the listings, our "x% commission structure", and keeping potential competitors out of our industry that we have not been doing the single most beneficial thing for our industry: communicating to consumers that real estate agents are the local market experts.

I emphatically believe that good real estate agents provide a tremendous value to home buyer and sellers, and frankly pretty much anyone who has bought or sold a home utilizing the services of a great agent agree. So that leads me to believe that our whole perception problem with the consumer comes down to one thing: marketing.

We, as an industry, have put so much of our marketing resources towards marketing listings, that the public has nothing left to latch onto other than "if you want access to the listings, you must use a real estate agent", and although that business strategy did work when the real estate professionals had a lock-down on the listings; it won't work anymore.

The listing war has been lost. It was a foolish war to wage in the first place. Our true, inherit, value comes from our local market expertise. That is what we need to market!

(*Please note that the title is not the true mission of NAR! NAR's actual mission is: "The core purpose of the NATIONAL ASSOCIATION OF REALTORS® is to help its members become more profitable and successful.")

Posted by Jonathan Washburn on 02/28/2008 01:15 PM

Comments (32)

nar, realtor

Originally posted at: jonwashburn: NAR Mission: To be the gatekeepers of listings, and protectors of commissions.*

32 Comments on NAR Mission: To be the gatekeepers of listings, and protectors of commissions.*

FEB

2008

Oh, I don't know Jon. Marketing is our Achille's Heel? I would look deeper for the root cause of the problem. Try crawling around in the ranks of this industry.

Sellers don't want marketing, they just want their house to magically sell itself...

Andrew, It is not our marketing ability, but about what we choose to market.

Jonathan, Thanks for the article. I have never really looked at Redfin. I was just over there reading the comments. Very interesting. I think I understand what you are trying to convey and I agree. We do have a public opinion problem and I do think it stems from the fact that there are a ton of "crappy" agents out there!! I use this blurb in my marketing...........Lots of people sell real estate, but not everyone is good at it. I do believe that phrase. So because of those that have tarnished the name of my profession I better find a way to change the perspective. I better show my community MY value. With the internet, the flat rate listing companies, the ever expanding world of FSBO help sites, I better get my game on!! This is where AR and blogging are the key - Localism is an amazing tool to show my experience and my knowledge.

The comment with the raincoats was priceless!

The listing war has been lost. It was a foolish war to wage in the first place. Our true, inherit, value comes from our local market expertise.

Couldn't have said it better myself.

I'm not certain that our image problem can be blamed on failing to communicate our value proposition. Look at NAR and their television/radio ad campaign. Our own trade association is having problems persuading consumers not to panic!

The perception that Realtors are overpaid is part of the great American pastime of looking down our noses at each others' occupation and saying "I could do that better". Teachers are underpaid because the public looks at their summer break and complains, "boy, I'd like to earn a twelve-month paycheck for working ten months". We all fail to recognize the value contributed by other occupations. Reducing Realtor incomes won't do anything to increase teacher salaries, but it gives them something to gripe about if they can point to us and say "You earn too much".

Add to the above the economic pressure on the consumer right now. With so many upside-down in their mortgages, it's understandable that some hope to sell on their own, dreaming of the ability to save a few dollars. In the hot market of previous years, selling looked easy. Good agents made it look easy. Now it is no longer easy, but the consumer hasn't a clue.

I think that a large part of our value is understanding our clients by listening to both what they are telling us, and being perceptive enough to ask the right questions and listen to how and what they answer.

Most people need a real estate agent as a... confidant/therapist/counselor/cheerleader/valuator/concierge/level-headed thinker/planner, and agents are also needed for support/knowledge/opinions/expertise and at a moments notice! I am sure you all can add more "things that you are and do for your clients".

There is so much "stuff" to buying a house and emotions that having someone representing "YOU", looking out for "YOU", taking care of "YOU" to make sure it all goes well, THAT is what most clients want in addition the bottom-line of either selling their house or buying their home.

Without an agent, most people would have a difficult time navigating and learning on-the-fly how buy a house. They don't have time, and they may make a huge mistake on any of a hundred details...buying a house is not an activity for most people without experts to help them.

Some people are savvy enough, willing to take the time to do all the background work to buy without an expert. There are some people who can, my dad is one. He also reads law on his own, does all his own research, spends many, many hours on it and represents himself on all sorts of legal matters. He also spends weeks, and weeks on doing his taxes, will not allow anyone else to work on his vehicles, reads up on medical procedures, interviews Doctors and tells them how he wants them to do a procedure, does all the work on his house, and on and on and on. All this of course means that he has no time for a life. Most people are not willing to make that much of a sacrifice and commit that kind of time to save money. There is a trade off.

We're not gatekeepers of listings, we're gatekeepers of wisdom! Knowing our local market, knowing the process, learning what the prospective client wants and is capable of, matching expectations with reality if possible, and then counselling.

You know in a sense, the tail might be construed to be wagging the dog with regards to our official mission statement. If we as an industry make it our first and foremost priority to increase the welfare of our clients, will that not by practical definition enhance our own well being...financial & otherwise?

I agree if we can not assist people using the knowledge of the market and direct them to competent people to help with financing and inspection we should not be paid. Thanks for th post.

Jonathan - That fact that so many clueless agents jumped on the bandwagon when the market was hot hardly helped the reputation either. I think one of the biggest misconceptions of the real estate industry is where the money goes at closing. When sellers review their settlement statements, they always seem to confuse the total cost to sell as the commission. If they were more educated on the actual amount of money real estate agents make, most people would be pretty surprised.

Your quote "In good conscience, I can't support an industry where the lousiest agent routinely makes more money annually than the best high school teacher in Seattle." is the perfect example. When you consider the cost of doing business, I would bet that average high school teacher did far better than most real estate agents did last year. Not to mention the fact that most real estate agents probably don't even have health insurance.

You are certainly correct that the public has a low opinion of real estate agents and it is going to be tough to overcome... if it ever is.

Jonathan, the "inherent value" of real estate agents has not been lost on the ones that are really committed- just to disgruntled sellers that were buyers at a bad time. That consumers have a hate campaign in a market in which they have likely overencumbered their propery, listed it with a dope that agreed to their price, relisted with another desperate dope, and are now really ticked. Except, the severe market surprised as many real estate people as it did sellers.

No one seems to share the ignorance when it comes to being suprised with a severe, and apparently longer than expected downturn. Sellers act shocked, buyers just stay away, and real estate agents that are here to make a living look at the whole debacle with extreme concern for the livelihood of desperate sellers, and their own ability to wait it out financially.

I'm not sympathetic with the real estate agent bashers. I agree that the NAR is a joke. What I disagree with is the notion that the real estate agents failed. This post perpetuates that notion, in my opinion. Our "value proposition" has been there for the taking for some time, for those that have chosen to engage in reality.

It is amazing what the perception is v. reality. the average agent makes almost nothing... is that more than a teacher... anywhere? But, we must all be rich. The average agent (full time at least) works a lot of hours that aren't in front of clients... but we hardly do anything for the money.

And don't get me started on Redfin. After all, their business model depends on that commission split, and listing agents taking the time to sellt eh property to Redfin's client... because there isn't enough time for them to do it.

Jonathan - are you sure those were really agents? It wouldn't be the first time someone posted as an imposter.

Larry,

Sorry for the confusion. I meant that those were comments left by consumers about agents. Not agents about agents.

I have a problem with an organization that does NOT live up
to its stated goal...to make its members more
profitable and successful.

NAR does NOT do that as a #1 priority.......
not from what I have seen.

I have heard so many times from REALTORS® that
NAR is a money making organization that does NOT
care about its membership.

It costs MORE money to stay active as a REALTOR®
than it does to keep your license in force.

I think that it should be the OTHER way around....

Does anyone agree with me?

=-/

FEB

2008

Jonathan,

Here, here. I couldn't agree more, but being an expert in your market and an information resource takes time and has a rather steep learning curve if you are computer illiterate. I have shared many a time with colleagues what I am doing with blogging and AR, and it mostly falls on deaf ears. O'well.

Jonathan - you've hit the proverbial nail on the head. Our value isn't in the listing data. We justify our existence and value by understanding our respecitve markets intimately, and being able to discern/apply the data through our knowledge & experience, to counsel our clients accordingly.

I wrote an article today over on SOUNDBITEBLOG along the same lines...

You want to raise the publics opinion of Real Estate agents? Then make it much harder to become an agent. Honestly... anybody can get a Real Estate license. It's not hard at all and it takes very little time. And because of this, we have a lot of really bad agents. We can't market ourselves out of our bad reputation. We Realtors have a bad reputation because we earned it, not because we didn't market ourselves correctly. I'm not saying that You or I earned the reputation. I'm saying that as a group we have not set our standards high enough, and as a group, there are so many bad apples that the good apples are all but invisible.

So, market yourself however you want, but if you're truly a market expert, you'll stand out from the crowd and people in your local market will notice. And they'll wonder why such a smart, professional, high caliber person like yourself ever became a Real Estate Agent.

Has RedFin turned a profit yet? If the system is so great then why do you have to promote negativity on traditional business models?

As long as I've been in the business, consumers have always had the choice to sell through who they want.

Hi, Jonathan - I'll agree with you 100% that our value is not in the listing data but rather in our local market expertise and problem solving abilities... but, and it's a BIG but, our public opinion problem doesn't stem from an attempted lockup of listing information.

Our public opinion problem comes from an army of untrained, unethical agents who serve their OWN interests above that of their clients. Not that long ago I had a conversation with an investigator with the Alaska Real Estate Commission - the conclusion was that the only way for the local real estate profession to get any worse was for it to be run by organized crime. Until we control how our membership operates and raise the standard for entry into the profession, controlling, or not, access to the listing data will be a moot point.

Jonathan - <Our true, inherit, value comes from our local market expertise. That is what we need to market!>

This is exactly what all of us should be doing, whether we're listing agents, buyers agents or a combination of both. THAT is where our value is - not in being the keepers of the gate.

Ann

Jonathan, yes, there are a lot of incompetent agents out there. And there are also a lot of incompetent teachers . My sister-in-law is now one of the best teachers in the Seattle area. And she is making a whole lot more money than when she was pouring her heart into real estate!

All it takes is one bad experience to sour a person's opinion. One bad apple in the barrel... If we hope to improve consumer opinion, we need to find a way to eliminate bad apples.

Great post Jonathan! Is there an answer? Probably not. We've heard it time and again about other professions in the way of short slogans such as "Physicians, heal thyself" when it comes to the medical profession. Lawyers have their own row to hoe, as do automobile sales persons, and realtors. Sadly, our profession seems to have migrated to the very bottom of the barrel.

The only thing I can see is for each of us to "win one heart at a time".

I have gotten my fair share of clients because of market knowledge but I have also gotten an equivalent share from advertising listings. Come to think of it, the combination of the two may be the reason for my existence the last 6 months.

People do NOT like us. I am doing a dual agency with a guy (buyer) who has the same type of attitude that someone who would use redfin does. I am slowly winning him over that I earn what I make.

Nice debate :)

You wrote....."It is clear to me that real estate agents have a public opinion problem." DUH!!!

Way..way..beyond public opinion problem. How about public knowledge problem. They KNOW most agents are'nt worth crap.

Problem isn't that statement but rather this one "communicating our value proposition".

What value? Don't start down the party line of rhetoric. Here's a hint, that's one of the reason that agents are looking up at the ant hills surrounding the proverbial totem pole. They keep saying the same BS.

rhetoric like "we're gatekeepers of wisdom! Knowing our local market" is foolish and quite sophmoric. In a matter of minutes anyone can find out just about anything, about any market in the country. School district information, crime reports, sexual predators, parks, values, churches, demographic make up, renters v. owners, barber shops, restaurants, theaters, who their prospective neighbors are and what they are like...etc..etc..etc..a real estate agents value has been severely diminished. An agent's value is solely that of convenience now. maybe that is what should be marketed. We do the work so you don't have to. Like a butler or a maid or a gardner.

The pay of course would have to be respective and correlative. Specialize and be a property concierge..whatever. But telling people you're an expert is laughable and makes you look quite dumb.

Yes, it will be a good thing when the MLS is brought tumbling down. The professional agents will thrive and the others..well, they get to go back and wait tables.

List persons have no value. They get a listing agreement, stick a sign in the ground and wait for someone else to sell the home. That should be the first thing abolished. No commission on listings. Commission paid on the one who brings the Buyer. Now that's sales!!

The guy who places the bread on the shelf does not get paid all that much. It's the guy who owns the bread (Seller / manufacturer) and the guy who sells the Bread (Retailer).

time to stop paying the merchandiser so much valueless compensation. In that regard I think the public would have a much better opinion.

It is a mistake to fight change. It is prudent to adapt to it.

Value is the most important to me. Marketing is important but the value side to me is so very important to my clients.They need to know that we care about them during this stressful time.

Jonathan: This is the third negative blog I have read today and each one of them was about bashing real estate agents. I'm beginning to think these websites like Redfin, Trulia, Zillow, etc. have been designed to make the profession implode. I've seen people's "real colors" today.

Jan,

I don't think my blog is at all negative. I think we have a real perception problem with our industry, and I would love for us to make positive steps to enact change.

We are in a noble profession, that serves a great purpose.

MAR

2008

I have to agree with Sharon, we are the ones who have the local knowledge and that is what makes our services valuable.

MAR

2008

Jonathan, As a 20 year vet in the Real Estate Industry and going with the flow with the electronic age of our industry and having not read the comments about Redfin it all comes down to this in my opinion: Real Estate Is Local and those who think they can set behind a computer and do the best job for a seller or buyer is fooling themselves and the consumer who places their trust in a such a scenario is fooling themselves as well. With all due respect to Redfin this is a people business built upon Trust and knowledge and those who gripe the most about their commission the loudest may not be earning it but the person who thinks they do not need professional representation are only fooling themselves. How can a computer give a client the details of any specific area without the input of a person and granted all Real Estate Agents are not created equal. The public has the right to ask hard questions to a potential agent and that agent should not be offended but they should know what they are doing as it comes down to trust. Wrote a article about this subject and if anyone is interested it's on Activerain. I apologize for the length of my comment.

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