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RedSpin simply spun!

OK, so I guess "60 Minutes and Redfin" is the topic du jour. I've been reading all the Blog fodder today trying to decide whether or not to chime in. Well, why not? It is an important topic and as usual I have an opinion, for whatever it‘s worth....

First, I want to link to the three posts, I have read on AR, that have addressed this "issue". There may be more posts but AR is too big for me to read them all.

Laurie Manny posted "Shame on you Redfin" It is very brief but hits on the Redfin agent (Kelly Engel) talking about how her conscious got to her for making $12,000 for five hours work and also touches down on the statement about Redfin handling the financing for their Buyers. The comments on this post are very good. Kelly even drops by to put in her two cents worth. I like the post but it doesn't really address the "issue" as I see it.

Neal Bloom wrote an article titled "Did Redfin show up or did they conduct the interview from their computer" Now, I like Neal, but did not like his article at all. It was very defensive and resorted to cutting down Redfin which in my opinion is doing the same thing that they are doing and is very negative. Sorry Neal, I'm not with you on this one. Redfin had air time and used it to their advantage. Why not? It's great marketing, and that seems to be their forte. So I can't fault them for that. By the way, talking about commissions is not a violation of the Sherman Anti Trust Act. Sherman is all about collusion and price fixing, a discussion, is neither.

Lenn Harley chimed in with "60 Minutes....Public Puff Piece by Purveyors of Publicity for the Percentage Possessed." Now, that my friends, is what I call a GREAT post title. OK, now we're getting somewhere. First, Lenn mentions the ReMax agent and her pathetic attempt to make us look good. Well, she failed miserably. I don't know if she was handpicked by Redfin or 60 Minutes but certainly managed to do more damage to our profession than anything Redfin said. But most importantly, Lenn wrote this "OUR BUSINESS IS NOT ABOUT THE COMMISSION PERCENTAGE. IT'S ABOUT THE VALUE TO THE CONSUMER OF SUCCESSFUL REAL ESTATE TRANSACTIONS. And she wrote this "these anti-REALTOR pieces will continue to air as long as we continue to ignore that we are paid for WHAT WE KNOW, NOT WHAT WE DO." Lenn, you go girl!!!!

OK, so here's my opinion. Redfin is NOT the problem. Redfin is using the consumer's perception of REALTORS® to their advantage. Redfin is also using REALTORS® defense of their commission to their advantage. They are creating a buzz. Frankly, I think they have a business plan that will fail but I firmly believe they have the right to try. They will fail because they are building a business by discrediting the competition. A successful business must be built on it's own merit.

As REALTORS® we are shooting ourselves in the foot, by trying to justify our commissions, by what we do, instead of what we bring to a transaction. We are harming our business by defending it against these types of attacks.

60 Minutes and Redfin are correct that there are many in our business that are grossly over paid. Not by the amount of money they are making but by the lack of value they are providing. I for one, will not waste my time trying to defend these REALTORS®. I would welcome a cleansing of our industry. If companies like Redfin help to shine a light on what's wrong with our industry then I'm all for it. Redfin is certainly not the solution but hopefully the attention they are getting will help us to reevaluate what it is we do and force us to "clean up our act" and make being a REALTOR® mean something again.

NAR needs to step up to the plate and make becoming a REALTOR® more difficult than writing a check. REALTORS® need to start putting their customers and client's needs first. We need to prove our value not defend our cost. My average commission is about $6,000. My customers are getting a steal. How about yours?

Related posts from Broker Bryant:

Compensation or performance? Which one will it be?

Monopoly my a...!

So, what do you do to justify your high commission?

Posted by Bryant Tutas Broker/REALTOR(R) Tutas Towne Realty, Inc on 05/14/2007 09:46 PM

Comments (77)

redfin, opinion

77 Comments on RedSpin simply spun!

MAY

2007

Reserved Parking For "The Lovely Wife"...TLW...ROAR!

Blog Boy...

There is a flip side to everything and I for one appreciate you flipping this in the direction it needs to go.

Maybe someday our efforts here will make a difference in this Industry.

Don't look at me like that...A girl can "dream"...Right? :)

TLW...ROAR!

Broker Bryant, I have to agree that any business built by being negative will fail. You reap what you sow. I hate it when I feel a need to defend my pay, such as it is. I'm going to learn to deal with that like a big girl.

BB,

I know you mean well and you are entitled to your opinion and maybe I worded it wrong by saying talking about commissions. And maybe it was a great marketing tool but it is an old story and they were just captivating the audience while they can. But you can't tell me that the way they were talking about our commissions and the different rates ...was not against some sort of ethics..after all I posted something a few weeks ago on one of Ardells posts about commissions and I was asked by Caleb to amend it or I could be liable for talking about that subject too openly. And do I need to bring up the part about the car? You can't tell me that most buyers would buy a home without seeing it in person unless it has to be a quick sale or traveling to see it is not possible. If I was the consumer I still want to touch it and feel it.

On the lighter note that's why the malls will never go out of business because we all want to physically feel it..not just order on-line and hope it is right.

And I agree we should not always want to hit the other side with the same crap but this was just too much from their side to just to let go and not say anything and you know they got me going when my rocket fuel was at it fullest! Almost like nitro in an engine. I did not expect everyone to agree with me as I do not always agree with their stories...but it did get your attention. Sorry I know i sometimes have to write a negative post as well as positive and funny ones too or there would be no excitement on the Rain.

And I was waiting for the day that you and I might not see eye to eye on something. So I am not mad or affended..but you got to admit I really never directly said anything against them..I just wonder LOL!

Broker Bryant, I lay a great deal of blame on the Broker! I have no idea how you manage your business, but I look around and see people--scratch that, empty skirts and suits, who can barely fog a mirror let alone stay current hanging licenses. I am still waiting for a return call from one from last June. Until NAR and the real estate commissions raises standards we will continue to have these attacks. As an Agent, not a broker, I am captive to the same broken system. I have had many conversations with my manager about this problem. He even agrees in spite of beign guilty of it himself, that we are our own worst enemy.

You get what you pay for...simply put. I agree with you. They created something to sqwak about supported by a Realtor who embarassed herself nationally... and do they have the right to try and promote themselves...sure they do. It is a big country comprised of all kinds of people. There is a fit for everyone.

Well, I am not going to defend my position. I know for some time to come I am going to be asked about that interview on 60 Minutes. So for now I am developing an answer in my head. I have come up with some good things to say but I could use some more. Any Ideas?

I think Allison is completely right. They have the right to promote themselves just not at our expense.

Also since I work for Remax..the agent might not have set a good example for Remax agents. My question to you is if they moved into your market..how would you seriously feel?

Awww....can't we all just get along? Slap...okay. I've been slapped (not literally) in the face by buyer's, seller's, other agents...as well as past boyfriends ...oops. (let on too much there). I have come to the understanding that there are good and bad people in all races, countries, neighborhoods, religions, faiths, businesses and professions. So...what are we to do? I totally agree with you that there are a lot in our industry that definitely do not deserve to be called "Realtors" let alone be making a "Realtors's" pay. The same goes with lenders or even the guy who sold me my car.

.....after getting a call from the newsman this morning I am still hoping I am saying minimal....to stay safe....why do I feel this way?

I go above and beyond (maybe to extremes sometimes...but nevertheless...feel okay with it) and I am able to go to sleep at night!

Ok I unfortunately did not see this show - from reading the posts here I wish I had - I know that we are often thought of as scum of the earth - but I have to agree - those of us that work and truly work the business and provide exceptional service are worth our weight in gold and trust me I have a lot of weight on these hips :o)

How did the Redfin piece denigrate Realtors? There is room in this business for all models. Redfin will capture its share of savvy consumers. However, will they capture enough to make it a sustaining business model? If Zip is any indication, Redfin has a tough road ahead. E-Realty burned through $33 million and had to close shop.

There is room in this business for all models. Redfin will capture its share of savvy consumers. However, will they capture enough to make it a sustaining business model? If Zip is any indication, Redfin has a tough road ahead. E-Realty burned through $33 million and had to close shop.

Nonetheless, I support Redfin's right to compete. If they can make it by giving away 66% of the co-op fee, then I say "let ‘em roll the dice".

And in the end......here we are! As BB says...

As REALTORS® we are shooting ourselves in the foot, by trying to justify our commissions, by what we do, instead of what we bring to a transaction. We are harming our business by defending it against these types of attacks.

Nick, I personally thought the REALTOR(R) did a better job of denigrating us than Redfin did. Redfin has a biz model that may very well appeal to some consumers. The question is will it be enough to make them profitable? I don't know. But they should concentrate on what they do right, not what we do wrong and vice versa.

Thesa, You didn't miss much. I found the show pretty boring. Same ole' same ole'. 60 Minutes certainly needs to get their facts right though. There were many factual errors. It really hurt their credibility. At least what credibility they had to begin with:)

Neal, AR has to err on the side of caution when it comes to Fair Housing and Sherman. It doesn't matter whether they are right or wrong. The fact is it would be too costly to defend in a court of law. Neal I compete with discounters every day. There are many in may area. Zip, Help U Sell, Flat Fee Realty, Buyer Rebate Realty, Assist to Sell, You Save Money, Inc, MLS 4 Less and many more. It never poses me a problem. I've actually referred sellers to some of them If they just could not afford my fee due to being over financed. Their businesses are different than mine. I am not competing.

Sally, Good REATORS(R) will always rise to the top. Competition is a very good thing. I've also worked with some very good "discounters". It's not what you charge it's what you do.

Jim, I agree completely. In Florida it is the Brokers responsibility to train and supervise their agents. The problem is it doesn't happen. The new biz model for a brokerage is hire as many agents as you can and charge them desk fees. You dont have to sell RE to have a successful brokerage these days. BTW I work by myself. I am the broker and I only have one agent and she is my buyer's agent.

Allison, That REALTOR(R) was something? I wish I could have been on the show. There is so much I would have said. Of course it would have been edited out.

Mana, You just have to be truthful. Click on the links I put at the bottom of my post. Maybe they will help.

Sarah, We should all be able to answer the question "How do you justify you high commission?" It's a valid question and should be answered if asked. Click on the link in my post by that title. It's a great discussion.

TLW, You look lovely today:)

I did not see the 60 minutes piece. I have read a lot of comments on several blog posts. I think if all they do is spend 4 or 5 hours on a transaction they will never be a serious threat to the way I do business. I would be too afraid to do it that way for fear the legal costs may eat up any profits I make.

Bryant - what a well written post - what more is there to say except well done.

BB , Now this is the post I was hoping for. Everyone tried but seemed as if they could not resist at taking a swipe at the Messenger.

I think it was in 1989 California was going through a devistating time in their real estate market. Agents were cutting commissions right and left. I won't mention the agents name now as it has been so long I don't want to pay tribute to the wrong person. But this agent was doing just the opposite of everyone else. He Raised he fees substantially. He said that he had more business than he could shake a stick at and had to turn listings away. What was his secret? He sold the homes. End of story.

BB,

I never said I would not work with an agent from the other companies..as a matter a fact I just received a call from one of them and might be negotiating a deal. I am not worried about them cutting into my market as much as them just using the media as their platform. I see others were wondering how much they were paid...I could care less..I just think I am worth more than that..and some deals take more than 5 hours just to negotiate...let alone complete in this day and age. I just think they could have been a bit lighter.

Nice piece Bryant.

I liked Neal's view as well as I like to see varying opinions and then decide which is the better view. But I guess people need to realize, as has already been discussed here, is that value is what should be driving prices, no matter what industry.

It comes down to the story of the plumber. You know, the one who charged a lady $150 for 10 minutes worth of work. The lady was disgusted and asked why he charged so much for simply hitting the pipe. The plumber then wrote a new invoice...$10 for hitting the pipe, $140 for knowing where to hit it. I think tells it all.

Herb, You hit the nail on the head. Results are what folks want. Being a listing Broker, like I am, there are only two possible results. If I sell the house I am a hero, if I don't, I'm mud. It's why I only list properties I can sell. There will always be a place for pros that get the job done.

Neal, My comment was answering your question "My question to you is if they moved into your market..how would you seriously feel?" The 60 Minutes's piece was an advertisement for Redfin. They weren't there to be fair they were there to slam the competition. The Redfin guy should be a politician:)

Thanks Cyndee.

Randy, Just keep on doing what you do. I am. :)

BB-I think we are placing too much emphasis on this. Our focus should be on working on image and I agree weed out the agents who do not do a service for the profession.

Yes NAR should do something about education requirements, maybe some agents would treat it more like a profession and maybe people will stop comparing us to travel agents(no disrespect) just a comparison.

Stop complaining and contribute to doing something about it. Get involved! We transform lives, we help people make the biggest investments of their lives. Is this how the public should see us?

We have to stop complaining and accept the fact we will always be targeted. It's the way we react the public sees and remembers! Very nice post BB......

BB,

Did you get the NAR email?

I was just stressing when they talk about the commissions ,NAR says there is no such thing as standard commission, yet they can mention it

Neal, Teri Eckholm just posted NAR's response to the 60 Minutes episode here.

http://activerain.com/blogsview/98643/NAR-Response-CBS-Misses

There's a link to the entire rebutal imbedded in her post.

Thanks for the response...I just got the email....well, I guess we can all write our personal responses....

And as your response stated.... Good REALTORS® will always rise to the top ...and that is a fact.

CBB: I watched the 60 minutes piece with great disappointment at the way it was handled. I'll say what I usually say active rain|active codgers, your active fans ©2007 Codger™ Images when Redfin, Zillow, et al, come up: ALL REAL ESTATE IS LOCAL. Ya' gotta go to the property, and you get a feel for the neighborhood, for the noise levels, for the 'look' of the area--before you even get to the house. How does the house look outside, then inside, HOW DOES IT FEEL, AS WELL AS HOW DOES IT LOOK?

Being internet and house savvy isn't enough (I am both). One needs to use ALL his or her senses when contemplating such a major purchase.

Jay

I believe the best defense is offense, not only in chess, but in business; including the real estate business. Great post.

Bryant, Do you ever NOT create a brilliant, well-written make-you-think post? Of course not!

I agree 100% with the following things that you stated:

"60 Minutes and Redfin are correct that there are many in our business that are grossly over paid. Not by the amount of money they are making but by the lack of value they are providing."
"Frankly, I think they have a business plan that will fail but I firmly believe they have the right to try. They will fail because they are building a business by discrediting the competition. A successful business must be built on it's own merit."

We cannot and will not prove our value when we do what Redfin has done, and shoot down our competition (Redfin). They ARE taking the side of agreeing with the public perception of Real Estate Agents. I prefer to CHANGE the public perception ... one client at a time.

BB - Great post and so many good responses. Being relatively new to AR, there are many older posts I have not read. I have been looking at this screen and reading for two hours. I became acquainted with Candybags, the post on Bloodhound Blog and all 100+ responses. And that was the beginning.

Your wisdom and insight should be "must reading" for new agents. Your Passion is undeniably authentic.

Thanks for sharing.

Phenomenal post, BB. And I can't wait to read Lenn's blog on the subject also. I agree that I am worth every penny and then some on my transactions. We all know that there are other agents who probably aren't worth a dime. I agree with you that tougher standards are the answer.

As a former fan of 60 Minutes, I am appalled that 60 Minutes would allow something to be aired without better research and some higher education for Leslie Stahl regarding the Sherman Antitrust Act and the meaning of the word "kickback".

The next time I watch 60 Minutes, it will be of Leslie Stahl loading photos of her home to her website and showing the public through her home until she sells it.

As a Realtor/Broker/Owner that specializes in land acquisition, development and marketing of new homes, if I don't produce sales there are economic consequences. Not only do my sales provide income for my developers who sell the lots, but the builders who build the homes, subcontractors that work for these builders. etc. Materials are purchased to build both roads and homes, property taxes are increased as these lot and home improvements are made which in turn improve our county's infrastructure and pays for our schools.

I am not worried about a commission percentage or lack thereof but about those people whom I represent and the people who work for them as well as their families. I will never be rich but I will never make my living attacking someone in whose shoes I have not walked.

I totally agree that there is room for all kinds of business models and no one should be putting Redfin down for their 60 minutes of Glory - as for "I firmly believe they have the right to try. They will fail because they are building a business by discrediting the competition. A successful business must be built on it's own merit"....that is just genius!

It should be the way we look at life and the way we do business. If to succeed you need to put your competitor down or make someone look bad, then you need to rethink your strategy, you won't make it very far.

I do wish Redfin good Luck and all I have to say about 60 Minutes is that I am disappointed...very disappointed!

Fellow Rainers

There is a proverb, Proverbs 27:17 "Iron sharpens iron, as one man sharpens another". We need to get our teeth kicked in occasionally to realize that we have a duty to have adequate skill and knowledge to advocate (notice I did not say defend) our role and value in this industry.

I encourage all of us to get into the habit of asking more questions than making statements. If you make a statement, end it with a question.

Client "Keith, you guys really got hammered on 60 minutes on Sunday"

Keith "What did you think of the program?"

Client "I thought they were a little biased, however the Redfin agent was pretty candid about how "overpaid you are".

Keith "Tell about your take on what she said?"

Client "She said she worked for a couple of hours, never even saw the house, and made twelve grand"

Keith "What bothers you about her comments"

Client "Heck, it sounds as though she didn't do anything and made a ton of money"

Keith "If she was your listing agent, would you feel you received your money's worth?"

Client "No way, it sounds as if she didn't do anything"

Keith "If I worked like that, I'd feel the same way. Do you think that the way I work is the same?"

So my suggestion is that we should have answers to explain "how we work". I am confident that with some fore thought we can make our points fairly and honestly.

Bryant~

You quoted Lenn...""OUR BUSINESS IS NOT ABOUT THE COMMISSION PERCENTAGE. IT'S ABOUT THE VALUE TO THE CONSUMER OF SUCCESSFUL REAL ESTATE TRANSACTIONS. And she wrote this "these anti-REALTOR pieces will continue to air as long as we continue to ignore that we are paid for WHAT WE KNOW, NOT WHAT WE DO."

You noted..."As REALTORS® we are shooting ourselves in the foot, by trying to justify our commissions, by what we do, instead of what we bring to a transaction. We are harming our business by defending it against these types of attacks. "

I'm thinking, too that Real Estate professionals have had a PR challenge for a very long time and it shows up in public...like on 60 Minutes......so let's remedy that illness-of perception by using this (and other forums) to educate the public.

I like your idea of educating people in our profession as well...

There will alway be cheaper faster transactions. Thats what Redfin is an engine.

Would you trust the largest asset in your financial portfolio to a dot com? It cant measure, mediate and provide an exceptional experience.

I think this will add a greater value to the true professionals. Individuals that cut fees will price themselves out of the Real Estate industry. You cant cut below ZERO, there is no bottom.

On the other hand in an article I quoted on my blog, www.blog.brianlebars.com, the Bloodhound blog quoted, "there is no top, either, no level of amazingly excellent service that cannot be eclipsed by an even greater effort".

Broker Bryant: I am so grateful that you have compiled the "Best of Redfin Today" for me :)

THanks!

Bryant, I saw your blog, I will make a quick review when I have a chance, :) it seems very interesting :) thanks

BB: "60 Minutes and Redfin are correct that there are many in our business that are grossly over paid. Not by the amount of money they are making but by the lack of value they are providing."

Such a great sentence, Realtors as a whole are their own worst enemy. There just are so many bad ones. Redfin success could probably be measured by the number of bad agents (which are by far the majority) filling the Realtor ranks. The good agents are worth whatever cost they demand, the rest are easily replaced by a Redfin/Buyside model, until that balance changes those companies will make headway. Those that are screaming the most about this story are the ones that should be the most worried. I love your response and confidence in yourself and your profession, you can and do provide value, some of these screamers I suspect aren't so sure they can't be easily replaced and are attacking the story out of that fear.

As alway, very well put. I don't know anything about Red Fin's business plan,so I'll have to take your word for it. I can always see a need for a good Realtor, though.

Heck yeah. You're right Bryant. I've spent the last three weeks and a lot of my Mother's Day vacation weekend on three particular escrows putting out fires, scheduling due diligence inspections, talking to the health department, escrow officers, pest inspectors, foundation contractor, other agents, and clients to make sure my clients get the home of their dreams, or get their home sold. They have no idea all the hoops that are being jumped through to make it to recording. I only involve them when needed so they don't worry unduly.

It's a good thing I love all this stuff. Agents that skip all the "details" and take the money and run will be found out in the end, hopefully sooner than later.

Fran

MAY

2007

This was a great article (IMHO) from the SoCalMLS:

http://www.socalmls.com/DispArticle.cfm?ARTICLE_ID=18860

NAR is on it!!! Let's hope it has positive results! See below from Realtor.org

Great post, BB!
______________________

NAR Responds to 60 Minutes' May 13, 2007 Segment

CBS News Magazine Show Misses the Mark

May 14, 2007 -- In the world of political campaigns, it's a standard ploy to set the stage with an empty chair when one candidate refuses to debate his opponents.

The CBS show 60 Minutes gave the NATIONAL ASSOCIATION OF REALTORS® the empty chair treatment in a May 13 segment that examined the impact of online brokerages on the real estate industry. The show featured interviews with a representative from the now-defunct eRealty and the president and CEO of Redfin, but no one from NAR, even though NAR twice offered and prepared Association spokespersons for interviews with Leslie Stahl. It was CBS that made the decision it would rather interview our opponents and let them make unanswered -- and inaccurate and unfair -- accusations about REALTORS® and NAR policies.

The one-sided journalism and egregious errors served no one well, especially the once-vaunted news magazine show. NAR staff spent nearly a year working with CBS, briefing producers on the issues involved. The producers attended the REALTORS® Conference in New Orleans and met with NAR's legal counsel for half a day in Chicago. Yet, still the segment was full of major errors.

NAR is in communication with 60 Minutes about its unbalanced reporting and presentation of misinformation and will be sending the CBS network a letter demanding an opportunity to correct these errors and misrepresentations.

Here are some examples of the misinformation:
Error: The six percent commission is "sacrosanct."
Fact: All commissions are negotiable. The average commission rate is not 6 percent, but 5.1 percent, according to Real Trends.

Error: NAR is the industry's "governing body."
Fact: NAR is a trade association. It does not govern the industry.

Error: In 2003, NAR issued new rules of its own that threatened to block Internet discounters' access to the MLS.
Fact: The Virtual Office Website policy did not block access to MLSs for discounters or any other brokers who are members of the MLS.

Error: The MLS is the database that lists virtually every home for sale in the country.
Fact: There is no single national MLS. Rather, there are more than 900 local and regional multiple listing services. These are not simply "databases" but private exchange of offers of cooperation and compensation between real estate brokers.

Error: Eight states have "minimum service laws" that require REALTORS® to provide a level of service many Internet discounters can't afford.
Fact: "REALTOR®" is a trademarked term and should never be used synonymously with "real estate agent." The intent of minimum service laws is to ensure consumers receive a minimal level of service from licensees.

Error: The brokerage industry has a powerful lobby. Eleven states flatly prohibit rebates.
Fact: The intent of anti-rebate laws is to prevent kickbacks in real estate transactions, not to limit brokers' incentives to attract customers. The brokerage industry does not lobby for anti-rebate laws.

Other key points 60 Minutes misrepresented or overlooked:

NAR supports all business models and favors none. Our 1.3 million members include REALTORS® who work on a full-service basis, as well as those who consider themselves to be limited service, fee-for-service, minimum service, and discounters. We think it's great that consumers have a choice today.

The real estate industry has harnessed technology for the benefit of consumers and will continue to do so. Real estate is both high-tech and high-touch, so can be enhanced by both electronic and personal interaction.

There is no such thing as a "standard commission." Commissions are negotiable and prices vary. The fact is that commission rates have decreased 16 percent from 1991 to 2004 (source: Real Trends).

The real estate business is unique in that competitors must also cooperate with each other to ensure a successful transaction, and MLS systems facilitate that cooperation. The first MLS was created more than 100 years ago as way for brokers to share their listing agreements with each another in hopes of procuring buyers for their properties more quickly and efficiently than they could on their own.

The MLS is a tool to help listing brokers find cooperative buyer brokers to help sell their clients' homes. Without the collaborative incentive of the existing MLS, brokers would create their own separate systems, fragmenting rather than consolidating property information.

Effective as of May 14, 2007

100% agreed that NAR should make becoming a Realtor more difficult. Alas this game is one that lets just about anyone play...doctors/lawyers/engineers/architects and many other professions have significantly more educational requirements before people can play - but success is much more likely. Realtor - opposite - anyone (practically) can play but success is limited to a few! Its the temporary ones...the ones who enter the playing field but sputter out in 1 or 2 years that certainly hurt the image of Realtors!

BB,

I have something to say, that there will be always rotten apples and mature apples, I was dissapointed "yes", but for what I read, I have learned here something, "Let the world roll", do your work, do your duties, love your friends and family and be honest, you will be rewarded when you less expect it. Who is wrong? Who is right? Who cares, some they will say "we are right!", some will not agree. You made great points and Neal made great points too. I like both of you, I was speaking today with Eric Bouler on the phone and I told him about the letter that I received from NAR, he told me, "do not pay attention to little details" that's the news, they want to create a great controversy, oh well, they created a huge one. And yes, there are some rotten apples around there that abuse from consumers and for some of them, consumers believe that many of us have the same cr.... they need to know who you really are!

Good Blog MR Bryant Tutas

There is a place for "less than full service" agencies. My stush is that they should be frank that they , indeed, are NOT full service.

We all have to step up!!! Bring the value to the discussions with our clients. Show them our knowledge. Be diligent about getting listing or buyer rep paperwork signed before sharing so much of our knowledge but once they sign...EARN our money! I am thankful that I can say I hae never worked for 5 hours on any given transaction. Even the "easy" ones require time and agressive representation. We all know it is the "what ifs" that can muck up a closing. We have to stay on top of things through out the transactions.

I think I will send a mailer to my client base and see what they think on the subject. I will be very surprised if they don't still want thte best service that I cna provide for their next transactions.

My post was not featured so I need to clarify what I am saying because it might not get as much as the attention of this post ..I was a bit criticized by my good friend and that is fine and he is entitled to his opinion and I am in no way mad at BB and he was kind enough to email me first about it ,but I need to defend myself again and if you read mine you will see I was more upset with not their business model as much as the fact that both people they interviewed they both straight out talk about a standard commission and again I will quote NAR that there is no such thing as a standard commission..how can Redfin say that..how do they know what I or anyone charges? Leslie Stahl thinks it is split evenly which is not the case most of the time and if you see the HUD1 at a closing you can't tell me it is always an even split can you?And the number she and Redfin mentioned is not true. The last line the guy from Redfin says sounded so vengeful ...he wants to change the industry...you know what let him try..first he should have a gag order for talking commissions..why can't we ..but he can...who is he? Is he a licensed Realtor? "Did Redfin show up or did they conduct the interview from their computer

Another question I have for you my friend is when they mentioned that our standard commission was X...were you ok with him dictating what they think our rates are and did Leslie Stahl read every settlement statement to see if the standard was split evenly as she said it was...I am sure if you were told that you would want to defend yourself..wouldn't you?

Is this guy licensed under the same guidelines as us to what he can and cannot say? Being a marketing genius is one thing..talking about something that does not exist is another.

thanks for your prespective.

Hello BB

Although I enjoy your posts I have to disagree with your statement that it's too easy to become a real estate agent.

The fault lies as much with training or the low quality of it offered by many brokers and franchises. Watching videos, online courses and talks given by more senior agents is not my idea of professional training. Allowing agents to go out and sell without passing some in house testing to see even if they can fill out the paper work properly really surprised me. I know things vary from office to office but I think the example I give is very close to the norm. Brokers have to shoulder their share of the blame not just the state licencing authority.

Far Far Too Easy to get a license!!! We need an apprenticeship! We need more accountability! We need more education requirements!!

Amen Brother Bryant!

CBS Here is the comment link for CBS- NAR has urged all Realtors to make a comment. Since apparently there is no 45 hour post licensing course for journalism or 14 hours of continuing education credit required perhaps we need to enlighten them and congratulate them for becoming 60 minutes of info-mericals. They did a fine job of failing to verify facts.

Well good morning everyone. I guess this post grew legs during the night. And unfortunately I am not able to monitor it today. As a FULL SERVICE Broker I have an 11am final walk through with one of my long time buyers(7 transactions), I have a 12:30 lunch date with one of my long term Buyer/sellers(4 transactions) and then back for a 4:00 closing with the first buyer. But the good thing is I will have a couple of hours of drive time so I can call most of my 21 current sellers and update them on how things are going with the selling of their properties. Sitting behind the computer in a Redfin office does seen appealing sometimes:)

Neal, You and I are just going to have to disagree on this one. Redfin and 60 Minutes is NOT the issue. The issue is the decline in professional standards in our industry. Redfin exist because there is a market for their type of biz plan. It may be small but there is a void they can fill. The void is there due to folks perception(reality) that they are not receiving value for their buck. I'm not really disagreeing with what you are saying I'm just choosing to use this negative 60 Minutes episode as a positive motivator to look at ourselves and try to change how we present ourselves to the public.

Everyone, regardless of industry/profession, should always remember they are judged for what they do and how they come across (and perception, indeed, is reality). With 1.2 million + members, that leaves a lot of REALTORS out there with a chance to taint the world's view of the rest of the membership. What's worse is that the REALTOR brand, like it or not, is not identifiably separate from the rest of the real estate agent world, so anyone who has a license, even a non-REALTOR, has the ability to taint the REALTOR perception of the public. It is a high responsibility we all bear to ourselves and to each other to protect that image and reputation. I, for one, would like to see a far more concerted effort on the NAR's part to truly educate the public to the difference and the value of the REALTOR brand (maybe that will justify the $16 membership dues hike x 1.2 million members?).

However, even spending all that money on positive brand differentiation won't change that a membership that is non-selective in its joining requirements will never be able to accurately portray itself as different from the rest of the industry. If anyone can join, what's so special and different about a REALTOR? Perhaps they need to start really pushing not just the REALTOR brand, but the designations that can be earned with additional training, education and experience, like GRI, CIPS, SIOR, etc. which by their very definition are selective and worthy of brand differentiation.

This probably doesn't fully address 60 minutes' piece, but since we don't watch or read the news (or care to) it just triggered a bit of a rant on my part!

Broker Bryant-

I think many consumers do not realize the value of the knowledge, experience, and advice that comes from working with a Realtor. I learned my lesson the hard way. 7 years ago, my wife and I bought our first home. After driving around for an eternity, looking at homes, we found the one we wanted, in the right neighborhood. It was a FSBO. I put down a deposit and we started the process...

After several attempts by the seller to back out of the deal, and an inspection that wasn't too bad, we finally closed after 3 months. The actual closing was the easiest part! Everything leading up to it was a giant headache - so for me, a Realtor would have taken that away - like a big Tylenol!

BB,

One last thing now that we got that off our chests.

Do you prefer Redfin or Yellowfin Tuna with your beverage? Hey.. did I discover another weenie? LOL!

Well said BB. I didn't go through all the comments so I don't know the reaction. don't need to. You're on solid ground.

I am really looking forward to meeting you, your posts are very well thought out, very well written. Being a "non" agent, reading the many Red Fin posts my 'education' so to speak is really getting a work out. I can't go into detail, my brain just won't go that way today. Thanks BB, for helping.

I think CBS needs to call in Bil O'Reilly for their next piece. That was definitely a Spin Zone!

Im going to have to agree that the industry does need a good cleaning. There are a good handful of agents that simply dont provide the service that they should, and unfortunatly they stick out like a sore thumb and give the rest of us that are customer service drived a bad name.

I always say that discounters and rebaters have their place in this market. However I provide full service(i've painted homes, mowed lawns when sellers were out of town)...and therefor I feel my work commands my pay. Likewise, their work probably commands their pay too.

CBs did a poor job researching their article. it was an editorial peace. Why didn't they go to the NAR or at least try and detail the role of a realtor.

NAr needs to go after CBS- look what they did to Audi (audi never lost a lawsuit over sudden acceleration).

Great Post Bryant- I wonder what will happen next?

Here's a piece written by Blanche Evans on Realty Times:

http://realtytimes.com/rtapages/20070515_sixtybiased.htm

Blanche made a very good assessment of the traditional agent in the 60 minutes piece - Deborah Arends with RE/MAX. This agent did a very poor job of explaining the benefits of a full service agent and to further justify real estate commission.

However, Blanche's assessment of VOW's and broker reciprocity was arrogant and does not benefit the consumer - the seller.

Great points, and counter points.....the one thing that has remained constant is it is not what we do, it is what we know. There will always be competition, and this "new competitor" is just making more people aware. All I know is people "trust, respect, and feel comfortable" using our services, when and IF that stops happening it is time for me to ride off into the sunset

Dick Beals

BB--I tried to comment yesterday but had computer issues arrgh!!!

Thank you for providing a thought provoking post on the whole CBS debate! I too had planned to avoid the whole topic as I thought it would just go away. My family had the show on during dinner and we all were very upset as my sons both have been listening to real estate conversations for many years and were aware of the inaccuracies in the story (Mom has never been paid $12,000 for 5 hours of work!--EVER!)

I finally gave in and posted when a past client called in the afternoon. After a brief discussion of the current market in the Twin Cities she made a comment about how it is hard to know what to believe after watching 60 Minutes yesterday. It was an eyeopener for me and wanted to post...not for AR...I did not post to any groups. It was so if my clients have questions, I could point them to my post so they understand the errors in the program.

There are different business models for every type of business. I agree 100% with you that this is not the real issue. Our clients are the most important--The public did not deserve to be misinformed by the media!

BB, I agree with you and TLW most of the time and this is one of those times.

So far, I have read both blogs and all comments for Laurie Manny and Broker Bryant.

I did not watch the program, because I don't normally watch TV and I was out of town anyway.

I am seeing a lot of defensive reactions to this and I believe that was one of the program's desired outcomes.

When I decided to become an REALTOR, I knew about the bad rep, but I had no idea how bad it was, until I started telling people what I was doing. And, what I saw in RE school kind of made me sick. Many of the people there made it clear, they were in it only for the money. Most of them were from another state, here to cash in on the Arizona Bubble. (they were not afraid to say it to us)(they were too late and I'm hoping they've gone home) :)

I could go on but I won't.

I was, and, I am still hoping to make a difference as a REALTOR.

Maybe this will be the needed wake up call?

I think I will go read a couple more posts...

Hey everyone, As always I really appreciate your value added comments and opinions. I've been out all day so have kind of neglected this post. Sorry!!! But I do have to work every now and then. It has been very interesting reading all the different posts and comments on this topic. I think we all agree that the show was just way off base. I also believe getting defensive over it is exactly what they want us to do and is playing into their hands. We need to take this show as a dose of reality and strive to be better REALTORS(R). That really is the only way to change the consumer's perception.

BB, you and Lenn are the two bloggers on AR that I always seem to agree with; I'd have no hesitation to hire either one of you. I've thought about what makes the two of you stand out, and besides having lots of experience, being intelligent, not being defensive, and being oh-so-good-looking, you each specialize in only one side of the transaction. I think there is something to this; how could you be the best at representing sellers if you were also trying to represent buyers? How could Lenn be the best at representing buyers if she also tried to represent sellers? "Conflict of interest" may be too strong a term, but I've come to the decision that I will only use buyer or seller specialists in the future. I think that's where the value of using a realtor really shines through.

Error: Eight states have "minimum service laws" that require REALTORS® to provide a level of service many Internet discounters can't afford.

This kind of says it all. We provide a valuable service, it is expensive to produce.

Providing little or no service is cheap. Let the public make their choice.

I know you love my opinions, so here you go. I think real estate agents are overpaid. There I said it. is it hard work? Yes. Does it take knowledge and experience to do it right? Yes. Should commissions have remained at 6% while home prices doubled and tripled in some areas? Absolutely not.There is just no way to argue that a house that costs $500,000 is twice as much work to sell as one that costs half as much. It simply isn't. Before anyone argues all I have to say is this:

Did real estate agents feel they were being underpaid before house prices doubled or tripled? I never heard any complaints. So, if that amount was fair, then the amount now is twice too much (you can adjust for inflation if you like). The reason agents have been able to keep charging that ridiculous amount of money is they have a monopoly on the market of buying and selling homes.....

BUT, that is all changing now. In the next 10 years the current business model that allows agents this disconnnect from economic principles will fall apart. It has only worked thus far for one simple reason: Housing has historically increased in value fairly accurately with inflation. With the way the mortgage business works these days that will not be the case anymore, therefore a new business model will have to be created for your line of work. I for one can't wait. Sorry.

I agree we should be defending the value we add to the real estate transaction, Happy selling

MAY

2007

Hi Bryant,

Thank you for writing an excellent and thought-provoking blog post!

I just wanted to say that I totally agree with this post and your follow-up comments. Redfin is not for everyone and I truly believe that the best thing we can do for the consumer is to give them a choice. Agents should spend more time embracing the value of their service (model) and less time being defensive about their commissions. Consumers are not clueless, they will pick the real estate model that best suits their needs. I can't help but laugh as these blogs pile up with silly comments directed towards my company and myself - these responses are more detrimental to the image of a traditional realtor than anything that was portrayed on the show. I would imagine many consumers watching 60 Minutes saw me commenting on my 5 hour transaction and thought "my agent just worked at-least 50 hours for me, she(Kelly Engel) is crazy." And that is just fine.

After the show aired I got a call from an agent in Sacramento who wanted to give me feedback on my comments. I listened to her talk about what an amazing and successful agent she was and how I was a pathetic liar working for a company that would be out of business in 6 months. She told me she makes $1.5 million/year. I then asked her if she called because she felt threatened by our company (why was an agent making $1.5 mil/year calling me?) and she paused into silence for 5 seconds and yelled "you look like a stupid idiot on tv!" I calmly told her that I was going to hang up now because she wasn't being nice and she yelled every 4 letter word into the phone and hung up on me. Hmmm.

Warm Regards and thanks for letting me share,

Kelly Engel

Hi Kelly, I agree 100% that the consumer should have options. I appreciate you taking the time to read and respond. My market's average sells price is right around 200k so I can't relate to making 20k 0r 30k on a transaction. I average about $6,000 and my sellers are every pleased with paying me. But really none of this is about cost it's about value. Different folks have different needs and should be able to pay accordingly. The consumer is smart enough to make their own decisions.

Hi Daniel, Thanks for stopping by.

Hey Ryan, Good to see you. I was starting to wonder where my consumer crew was at:) I truly believe it depends on the market. As I mentioned in my comment to Kelly my average commission is about $6,000. And at that price my sellers are getting a steal. Ryan there are all ready many biz models in my market for the consumer to choose from. Some charge less than me and some charge more. I get business because I get results. It doesn't matter what the consumer agrees to pay if they don't get their property sold. If you have a reputation of getting results then compensation is not a issue.

Christine, Thanks for reading and commenting.

John, Good to see you. Thanks for the compliments! Great way to start my day:) I too respect Lenn quite a bit she is definitely someone I would feel comfortable working with. I feel that she would fight to the death for her buyers:) Working only one side of the transaction has been one of the best things I have done in my business. Sellers love it and I do too. It really avoids any hint of conflict of interest. It makes me a much stronger salesperson. Lenn and I have mentioned to each other that even though we work opposite sides of the transaction either one of us could switch sides and still be just as effective. We both believe in placing our customer/client's needs as our top priority. And you just can't do that working both sides. If ALL Realtors(R) would pick a side it would go a long way towards changing the way our profession is perceived.

Hey BB,

Fine day we are having,nice dark clouds..maybe even darker than this cloud. :)

Oh..this is the wrong post..I was looking for the nice post not the controversial one..since I make the decisions to comment on posts then I'll just say everything is forgotten and this issue will blow away in the wind soon enough. I'm waiting for the phone to ring instead. :)

And BB nails it again! Very insightful post and right on the thoughts I had in my head when I wrote my last blog post. We have to raise the bar and show the consumers the value we bring, not the money we charge. Thanks!

>We both believe in placing our customer/client's needs as our top priority. And you just can't do that working both sides. If ALL Realtors(R) would pick a side it would go a long way towards changing the way our profession is perceived.

BB, this smells like it could be yet another featured post for you, although you would probably bring more wrath upon yourself than usual. :)

John

MAY

2007

Hey Kelly,

I got a good chuckle out of your "$12K for 4 hours of work" comment. I was wondering why you gave such a good gig up for a desk job with Redfin? LOL

Anyway, there is room in this market for all business models. Just like all real estate brokerages, Redfin will have to work at making their business model profitable. Venture capital only last so long.

For me, however, I'm glad the 60 minutes piece gave air time to the rebate model. I'll run with it now...

MAY

2007

Broker Bryant: This was an exceptional read, very well thought out with great points. I for one, do NOT think that I am grossly overpaid for what I do. Having left a commissioned position, I feel that the value that I bring is in knowing my business, going the extra mile, and making sure that my clients have received EXCELLENT service. I won't settle for less. And if they put their confidence in me, either will they.

MAY

2007

BB---As I was midway through reading your post I was literally standing feeling the need to clap :-) Once again a phenomenal read! I have to agree with your wisdom and insight as usual. I am just as frustrated as everyone else with the discount models. However, we are "fueling" the proverbial "fire" that we as real estate professionals fight to extinquish. IMHO we should be confident enough in our offerings, service levels, and skills that those models shouldn't make us get our "panties in a bunch"... Your view and translation of this topic have been very enlightening and eyeopening. Thanks!

Amber, Those are some mighty kind words:) I actually do not have a problem with other biz models, whether they charge more or less than me. I've built my business on my reputation and how I conduct my business. We ALL need to concentrate on providing value to our own customer/clients. If we do that, then these alternative business models will have no effect on our businesses. There's room for all and the consumer should have options.

Thanks everyone for reading and commenting. I seem to have neglected this post. Sorry about that.

SEP

2007

Bryant, I'm a little late to this party, but I have just started researching Redfin and I say bring it on. Our value is our service, not our business model.

I came across a consumer blog last night that got me a bit ticked off, and after reading this one of yours, I thought it would make you just as mad. It has over 300 comments ragging about REALTORS - anyway, if you want to check it out you'll find it at Have You Heard What the Public is Saying About REALTORS®?

Now Have a Blessed Day,

John Occhi, Hemet CA REALTOR®
Mission Grove Realty

AND PROUD TO BE A FULL SERVICE REALTOR®

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