Pre-Listing Packages are important, but in this episode of Power Tools, we talk about two big reasons why.
What to Watch on Netflix for Realtors
I’ve been on something of a documentary/video course/non-fiction kick lately. If you’ve read this blog long enough, you know that I love to read, but I like to have something on in the background when I am working at night. These are some of the titles, in no particular order, that have caught my attention recently. I hope that you enjoy them as much as I did.
1) The Crown
I’ll be the first to tell you that as a red-blooded, bacon-eating, gun-toting, Texan, I was surprised to like this series because let’s be honest, who needs a silly bunch of entitled, British figureheads? Not only is this series very well done from almost every perspective, but it also teaches a very valuable lesson about patience and endurance. While the rest of the world, at times, crumbled around her, Queen Elizabeth plays the long game better than most. Likewise, serious Realtors should be looking years into the future, not to next week’s closing or yesterday’s short appraisal.
2) Chef’s Table and Abstract
These are both outstanding series that highlight amazing artists. Chef’s Table follows a groundbreaking chef in each episode and tells their story. Abstract does similarly for artists, from illustrators to shoe designers. I am inspired by and love learning from creatives, specifically those whose lessons can translate to business. For agents, I love these to stimulate creativity and take your train of thought down an unconventional path. Think about the way these artists and chefs challenge traditional thinking.
3) Inside Bill’s Brain: Decoding Bill Gates
If nothing else, it’s cool as shit to see the daily routine of one of the world’s smartest and wealthiest men. What I liked about this limited series, though, was the controlled scheduling by which Bill Gates lives his life. I tend to get off-task very quickly. I try to make up for it by being very strict with my schedule, but nothing like Bill. I also am inspired by how much he reads and his drive to impact the world and leave it a better place.
4) Jiro Dreams of Sushi
Subtitle warning. You better be ready to read a movie. If you invest the time, however, you won’t be disappointed. Jiro Dreams of Sushi tells the tale of Jiro Ono, possibly the most renowned Sushi chef ever. This show is an ode to discipline, practice, and persistence. When Brokers and coaches tell agents that it’s the little things done repeatedly, every day, that build a successful business, they should just tell people to watch this documentary.
5) The Black Godfather
Never heard of Clarence Avant? You’re probably not alone. Uncensored, unabashed, and relentless, Clarence might be one of the most influential black men in America that nobody knows. Just watch the list of Hollywood stars, politicians, and musicians that agree to go on camera to celebrate the life Avant. There are a host of lessons here, but these are my favorites: always be yourself, know & demand your value, we are better together than apart, it’s not what you know, it’s who you know, and each one, teach one.
6) Brene Brown: The Call to Courage
Ok, I admit it. I was late to the Brene Brown party. Just watch this. It’s all about being vulnerable and how that creates strength in a person. In real estate, there is something of a funny dichotomy. If you’re male, you are supposed to conform to traditional norms. If you’re female, you are expected to put on a mask and hide any vulnerability. Nonsense, says Brene Brown. Go watch this and think about how you can use this to help grow your business.
7) Self Made: Inpired by the Life of Madam CJ Walker
I wrote about this story on Facebook from a web video I saw a couple of years ago. It’s the story of America’s first, self-made female millionaire. Born a slave, Madam CJ Walker eventually lived next door to the Rockefellers after building a hair care empire. Wonderfully acted by Octavia Spencer, this series won’t disappoint. It’s an inspiring story of overcoming incredible obstacles, never taking no for an answer, focusing on quality, and caring about people being their best selves.
8) The Battered Bastards of Baseball
Heartwarming, hilarious, and heartbreaking at the same time, this tale of the Portland Mavericks is a seriously fun watch. Established by Kurt Russel’s father, Bing, the ragtag team of independent players challenged the establishment, broke all of the rules, and had a hell of a good time doing it. In the meantime, they laid the foundation, at a time when there were none, for future independent baseball teams. Agents should watch with an eye towards breaking tradition and challenging the status quo.
9) Minimalism: A Documentary About the Important Things
Last summer, I made two tragic mistakes. The first was spending a weekend in a tiny house with my family. The second was taking an RV trip with the aforementioned family. Never again. I need more space. That said, this is a story about getting rid of the unnecessary and focusing on the important. I know A LOT of Realtors who could benefit from that advice. If you like this show, give Essentialism a read. You won’t be disappointed.
10) Hip-Hop Evolution
If you grew up in the last 30 years or just like hip hop, watch it. I don’t know how many business lessons can be drawn from it, but all work and no play make Chance a dull boy. This is pure awesomeness.
What are you watching?
Power Tools – Using Video to Grow Your Business
In the first of episode of Power Tools, we talk about leveraging the power of video to grow your business. Look for new videos every Monday morning!
The “Plan” For 2020
I’m not a huge fan, at all, of new year’s resolutions. I just think that choosing a day to all of a sudden change your life is generally foolish, proven by the number of broken resolutions by the end of January. The symbolism of the new year as a time for new things isn’t lost on me. However, if you need January 1 to come around to tell you that your ass is fat & that you need to lose weight, I hate to break it to you, but you haven’t been being really honest with yourself for all of the time it took for your ass to get fat (I say this as I am, in fact, trying to skinny up my fat ass).
In the past, I have tried to use a theme as a direction for goal setting for the year. A couple of years ago we set a theme for the year that has really taken over our direction for all goal setting. That theme, “Do For, Not To” has become a sort of secondary mission statement & corporate philosophy.
So, this year, not liking to set resolutions & not putting a theme to the year, I am at something of a loss on how to express the plan for the year. Before any of you jump in & say choose a word that you’ll focus on for the year, no. Just, no. That’s nearly as bad as the resolution thing. Maybe worse.
I’ve known for months that the overall plan for the year would be process efficiency. After a year of extreme growth, we are going to invest a significant amount of time on hammering down the basics. We’ll be applying the “Do For, Not To” philosophy to every aspect of our business to make sure that, as we grow, we do so in an easily replicable, efficient, & high-culture way.
There have been two ideas running around in my head over the past few weeks as I have really tried to figure out what 2020 is going to look like. Not really words to theme the year. Not really resolutions. Not really even a goal-setting standard. Just two ideas that have really been nagging at me.
First, simplicity. After reading Essentialism by Greg McKeown, which I recommend, I have been thinking more & more about cutting the extraneous bullshit from my life. Then I’ve been watching documentaries & reading books about super-high performers in business & life. All of these people shared something in common that I am woefully terrible at doing. They all simplified the basics in their life. From things like Zuck and Steve Jobs wearing the same thing every day to Warren Buffett literally doing almost the exact same thing every morning of his life, they were sticklers for freeing up their minds from having to make trivial decisions. So, I am working on routine. My hope is that it will allow me to focus my time, thoughts, and resources on the most important things I need to be focused on doing.
The second thing is something I have been trying to define in a word & just can’t. The first word I thought about was “intentional”, but that’s not the right word. Also, I sure as hell hope we’ve already been intentional. We owe it to all of our agents, clients, community partners, & vendors. It’s more like intentionality combined with foundational combined with evergreen. Confused? Yeah, me too. The point is that as we take a look at literally every aspect of how we run our business, I want our approach to be from a position that we are re-laying the foundation of the business. What we did originally has served us well these last five+ years, but now it is time to revamp, refresh, & reassure that the processes we develop now will last us years into the future while enhancing our culture & our service offering. It’s a tall order, but so are our long-term goals.
There you have it. That’s the plan. As they say, it’s always best to share your plan publicly. Apparently it makes you far more likely to achieve it. I’ll be honest with you, the routing part is going to be the hard one for me. I’m a work in progress, though, & will continue to focus on the progress.
Hope your 2020 is amazing!
Overwhelmed, Again (Part 1)
It’s been just over two years since I wrote in this blog. My last blog post, “Overwhelmed”, was about my experience in the wake of Hurricane Harvey. A lot has happened since then, but I’m glad to come back with this post because it is all about something great that rose from the storm.
In The Beginning…
As I sat there, overwhelmed, watching the devastation of Hurricane Harvey, it became abundantly clear that, in my brokerage, we were very good at deploying human resources, but we lacked in processes & systems to deploy financial resources in time of need. We were fortunate that we only had a few agents seriously affected by the storm, but it was definitely a wake-up call. Something needed to be done, quickly.
Through a few text messages with my attorney, it was decided that we would start a charity, the CB&A Foundation.
What The Hell Are We Doing?
So, we started a charity. Now what? I had no idea what to do & it wasn’t like we were messing with something being scrutinized heavily by the IRS or anything! So, we created a Board of Directors. That would solve everything, right?
So there we sat, at a conference table, not having a clue what we were doing. Strength in numbers, or something like that. We started with the basics. Coming out of Harvey’s wake, we wanted to primarily make sure we had funds set aside to help our agents in times of emergency needs. In a brilliant move, one of the Board members completely made up a formula. As such, we now had a baseline for reserves.
From there, we decided that any funds raised in excess of that completely made up reserve amount would be put back into the community. Again, we had no idea what that looked like, but…
Our Agents Came Through, Again
Just like during the Harvey recovery, a simple mention to our agents resulted in an overwhelming number of suggestions for who to support. We went from not very sure to having a very real problem, there were so many options we didn’t know how to choose one. If you read the follow-up to this post tomorrow, remember this point. A seed was planted, but we needed time.
Based on multiple suggestions, the proximity to our office at the time, & its reputation in the community, we decided that if we had any money left over after filling the reserves, we would support Cy-Hope. Specifically, we would try to raise enough money, $15,000, to underwrite their summer camp. At this point, I honestly didn’t know if we would raise $15, much less $15,000.
Press Fast-Forward
In the following year, we left our franchise & went independent then moved our main office. It was something of a whirlwind, but we did it. We raised not only the amount for our reserves, but we raised enough to send 125 kids to summer camp, sponsor a calf in the calf scramble at Rodeo Houston, start a scholarship for entrepreneurs at Sam Houston State University, & match donations of 100 wreaths to Wreaths Across America.
Overwhelmed. I’m overwhelmed by the generosity of our agents. Overwhelmed by the power to create change in our community when people of the same mind come together. Overwhelmed.
That’s it for now because I don’t want to ruin the surprise. I’ll be back on Thursday for the 2nd chapter of this post & the life-changing impact we will have in 2020 & beyond in the communities we serve. I am incredibly excited for it.
Thanks for reading. It feels good to write again. In 2020, I plan to post more often, include interviews with important (to me) people in the industry, & whatever feels good. Hope you’ll stick around for the ride.
Overwhelmed
For the past week, I’ve struggled to put together my thoughts and feelings about what has happened in Texas since Hurricane Harvey came ashore. As I sit here writing this, trying to put these thoughts in order, I can’t even remember what day the storm hit us. Everything has just run together. As I was working at our church a couple of days ago, a word just popped into my head to describe my feelings. That word was overwhelmed.
We were overwhelmed by a storm that just kind of snuck up on us. Even just hours before it made landfall, it was supposed to be a small storm that hit and then went away. Then it wasn’t. All of a sudden what was just supposed to be a “rain event” for most of Texas turned into an overwhelming storm that destroyed the area where it made landfall and continued to wreak havoc for days on end.
The amount of rain was absolutely overwhelming. What started as 10 inches, a significant amount, turned into 30, 40, 50 inches. The amount itself is overwhelming. It’s hard to fathom over 4 feet of rain. We’ve flooded before. People have had four feet of water in their homes before. But four feet falling out of the sky? I mean, you hear 27 trillion gallons of rain and that’s not even something you can wrap your head around. Even the numerous infographics don’t help make it realistic. It’s just overwhelming.
The area affected is overwhelming. This storm is not a Houston thing, or even a Gulf Coast thing. Central Texas, South Texas, the Coastal Bend, Southeast Texas, and East Texas were all impacted by Harvey. In Houston, we see flooding in certain areas when we have the aforementioned “rain events”, but there was hardly any part of the metro area that wasn’t affected. The sheer number of homes, businesses, and people who have been damaged and displaced, many who never flooded before, is overwhelming.
The emotions have been overwhelming. Name one. They’ve all been seen this week. Despair, heartbreak, fear, anger, guilt, and the list goes on and on. The emotional toll for many will be as damaging as the rain. It’s just been an overwhelmingly emotional week for everyone, even those who didn’t flood.
Trying to find the words to describe this has been overwhelming. If you aren’t here to see it, you almost wouldn’t believe it. It’s impossible to wrap a keyboard around it all.
But as the rains slowed and, finally, stopped, something else happened that was absolutely overwhelming. People came out of hiding and immediately hit the ground running to help. Not just Texans, though. The Cajun Navy showed up early, pulling people from flooded homes left and right. People from all over the United States descended on Texas like the rainbow to the rain that had done so much damage. National Guardsmen, police, fire fighters, doctors, nurses, electric workers, and more service providers and public safety folks showed up within days, many from as far away as New York. So did just random people looking to help. I’ve seen lemonade stands from North Dakota and the Caribbean with kids donating their money to relief efforts. The response has been overwhelming.
Neighbors who may have never met the person one street over were there with hammers and knives, removing sheetrock and cleaning out damaged houses. Lines of people with donations and supplies, or ready to help their community were as long as the lines of people in need of that help. JJ Watt’s YouCaring.com fundraiser, has raised nearly $20 million from over 180,000 donors so far and isn’t stopping. While there have been a number of high-profile donors, the majority of the money has been raised by “regular” people, with an average donation of about $100. It’s been overwhelming (at times to the YouCaring servers, too).
As the waters rose, a funny thing happened. All of the reported dividing lines in our society got washed away. Black, white, brown, and yellow lined up side-by-side to serve or be served. Republicans and Democrats, gay and straight, rich and poor, and every other social construct that the news would have you believe divides us were dissolved by the overwhelming need to just be together and support all of our friends and neighbors regardless of our perceived differences. The unity of this city has been overwhelming.
Since this is, normally, a real estate coaching blog, I am proud to say that the response of the Realtor community during this storm has been so incredibly impressive. I am proud to be a Texas Realtor. From actually being on boats rescuing people, to setting up and delivering supplies into much-needed areas, to giving time and money to relief efforts, to getting out and helping friends and clients start their journey to recovery, it has been overwhelming to see the hearts of these Realtors shining in the community. Not to limit it to local agents, funds and assistance have come rolling into Texas from our colleagues all over the country.
We have a long way to go, to be sure. There are still areas where people can’t get home, get clean drinking water, or even drive on some freeways. We have hundreds of thousands of homes to rebuild, families to return to something that looks like normal, business to reopen, lost lives to remember, and plans to redraw to help make sure this doesn’t happen again. The amount of work ahead might look overwhelming, but as I write this, based on what we’ve seen these past 7 days, I have an overwhelming sense of hope, resilience, and optimism. HoustonStrong and TexasStrong will, I believe, be the war cries that show the rest of the country and the world what it means to come together to rally, respond, and recover stronger and better than before.
I want to just take a second before wrapping this up to give thanks. If you are reading this and have donated, worked, helped, given, served, volunteered or done anything to help in this relief and recovery effort, I want to thank you. It’s because of you and those efforts, no matter how big or small, that we will not be overwhelmed, but come out of this stronger.
Price Per Square Foot is Bull$hit
99% of my posts here are designed to help Realtors grow a better, more profitable business. This post is no different. However, unlike most of my posts, this one is just as applicable to the real estate consumer as it is to the real estate practitioner. Why? Because I hope it will dispel one of the most prevalent mistakes in real estate: the fallacy of price per square foot. Despite its prevailing use in valuing property by both Realtors and consumers, and its marketing appeal by certain builders…
The truth is that price per square foot is garbage and means almost nothing.
But how can it be garbage if everyone uses it, you ask? Let’s take a look, first of all, at the simple mathematics of why it is garbage and then we’ll examine why there is no practical application of the price per square foot measurement that, at the end of the day, matters. (One quick caveat: this post is not really applicable on commercial properties.)
The Simple Math
Price per square foot doesn’t hold up under the microscope of scrutiny because of simple mathematics. Whether you are selling a home and trying to figure out a sales price, buying a home and trying to see what kind of value you’re getting, or using price per square foot as a marketing technique, you are wrong. Here’s why. In an average community there is a wide range of home size, shape, and features. To take a real simple look at this, consider the following:
- A one-story home costs more to build than a two-story home. As such, the price per foot on a two-story will be less than that of a one-story.
- A smaller home will have a higher price per foot than a larger home. If a garage door costs $1000, you have fewer square feet to spread that cost over on a smaller home. Thus, the higher price per foot is natural.
- What about upgrades, renovations, pools, etc.? An upgraded or recently renovated home should have a higher price per foot than a home that does not. How many dollars per foot does a pool cost?
- A builder marketing themselves by price per foot is full of shit and you should run away. I can build a Lincoln Log home for a remarkably low price per foot, but would you want to live in it? The only world where this kind of marketing works is a world where every single builder built the exact same home with the exact same construction techniques on the exact same piece of land and the exact same features. Then price per foot would not only be applicable, but also, once again, completely useless because it’s the same thing for everyone. So, until communism sets in with the builders, price per foot is absolute nonsense.
So, based on that, taking a look at the price per square foot of a neighborhood and applying it to a single property is necessarily going to result in an incorrect value. If you’re the smallest home in the neighborhood, the value you get by using this method is almost certainly going to be low. On the other hand, if you’re the largest home in the neighborhood, you’ll be priced to high. How, then, do you correctly value a home? We’ll get to that.
The Practical Application
Ok, I admit that this is a bit of a fake news subheading. There is no real practical application of price per square foot for one reason and one reason only. Appraisers don’t use price per square foot to value residential properties. That’s really it. You can come up with whatever convoluted price per foot you want to come up with, but if you are selling a home that will be financed or buying a home using financing, it doesn’t matter what you came up with because the appraiser determining the value of that property doesn’t care and isn’t going to use it as a factor in determining the value. Don’t believe me, pick up the phone and call your lender or an appraiser. The really simple, ugly truth is that price per square foot is useless because the appraiser valuing the home isn’t going to use it to decide the value and the appraiser’s value is what gets you to the closing table. End of story.
The Solution
How, then, do you value a home you want to buy or sell? Well, if the last paragraph didn’t answer that, you use the same method as an appraiser. Appraisers look at comparable properties to value a subject property. It’s really that simple. You don’t see an appraiser using five 2,000 square foot, single-story homes to come up with a value for a 3,000 square foot, two-story home. That should be pretty common sense. Yet, time and time again I see and hear people upset with a “bad” appraisal because the price per foot doesn’t make sense. You’re right, it doesn’t make sense. Now, let’s look at comparable properties and see where the disconnect was. That makes sense.
And now for the industry-serving portion of tonight’s programming. Who can help you come up with a correct valuation? A knowledgeable Realtor, that’s who. Not a Zestimate, not a community newsletter where someone gives a range of prices and you do some math, not a builder claiming that they build three dollars a foot cheaper than their competition, and for damn sure not by looking at what your neighbor sold their home for and saying that your home is nicer and bigger. A knowledgeable Realtor will pull comparable, recent, sold data for you and put together an accurate market analysis. Ignore the price per foot fallacy, get a good valuation of your property, then buy or sell and get to the closing table without an appraisal mess to deal with.
Us vs. Them
On Monday, I was having a conversation with my business coach about some things that have happened over the past year and the ramifications of those things on the future. Specifically, we discussed how my actions, or reactions, to the events may have an effect on the future. Even when we don’t think we are involved in an impactful way in something, our limited involvement still affects our end result. But, the thing he said during that brief exchange in an hour-long phone call that stuck with me was that the difference between people who make the most of a situation and those who don’t is how they accept their role in the situation.
This afternoon, I was talking with one of my agents about an agent he knows (and we all know an agent like this one) that was all drama. She was constantly making excuses, placing blame, and putting out fires in her business and personal lives. It reminded me of a favorite quote of mine from Dan Stewart, “People who spend most of their time putting out fires are also usually the arsonist.”
The root of the issue is this: whether we admit it or not, we are responsible for what happens in our lives, period.
How we react to what happens in our lives is, ultimately, what defines our success. We can choose to accept our role or responsibility for the things that happen in our lives or we can choose to place blame, deflect, and/or ignore. Our reaction can manifest itself in I/me/we/us talk or they/them/you talk. If you adopt the former, you are far more likely to learn from the situation and be better off in the long-run. On the other hand, people who adopt the latter are far more likely to be miserable, angry, and full of contempt.
The I/Me/We/Us Crowd
If we choose to take the things that happen in our lives as steps in our overall journey, we can begin to accept them and use them as growth factors. But, it is a choice, and for the big things, it’s an active (and sometimes very difficult choice). Believe me, I’ve been there when it’s really difficult to choose to make the best of things, and, yes, I have, on more than one occasion, made the wrong choice. It takes work. It takes time. If we pause for a minute when these challenges confront us and consciously make the choice to accept the responsibility for what’s happened and react in a way that moves us forward, it can become habit.
The amazing thing is that when this habit really starts to take root, it will radiate out into other parts of your life. You’ll start to see the best in almost all situations. You’ll see opportunity where you may have previously avoided a situation. You’ll become more magnetic, attracting the kinds of situations and people you want to have in your life. And you’ll live happily ever after, or something like that.
The They/Them/You Crowd
On the flip side, the other crowd is miserable, angry, stuck in their current situation or worse, and, worse than anything, oftentimes alone. Their reactions to the things around them drive people away. Nobody wants to hang out with someone who is constantly upset or miserable or just a drama queen do they? The drama of it all costs personal and professional relationships to go bad. In a world where it’s not what you know, but who you know, who wants to drive away people?
The Challenge
If you find yourself, honestly, a member of the first crowd, good for you. Keep it up. If not, I have a challenge for you. Not to get all motivational speaker on you, but this will really work. For the next 30 days, I want you to track the things you are grateful for in your life and look at one thing, each day, that you reacted to and how that reaction might have been different. You don’t have to get all fancy with it. A simple notepad will suffice. In the morning, before you start your day (even if it requires waking up a few minutes early) write down 5 things that you are thankful for. Then, in the evening, as you wind down the day and have a few minutes, write down one thing that happened that day and how you could have reacted in a way that could have propelled you forward in life. At the end of the month, you’ll not only have built a habit of gratitude, one of the most important factors in seeing life in a positive light, but you’ll have actively practiced, every day, addressing the things in your life in a way where you are looking for the best in them and the best in you. These are two very powerful tools.
Once we start to build the habit of reacting in a way that moves us forward, we can change our lives for the positive in ways we can’t imagine are possible when we are placing blame and reacting defensively. It takes effort, but like anything that requires effort, the reward is almost always worth the work.
Do For, Not To
I’ve actually been working on this post for quite a while now, but just haven’t found the right thing to tie into to make it work. Thanks to the shitstorm surrounding Zillow’s Instant Offers that has happened over the past two weeks, I owe them a bit of gratitude for helping me finish this up. The problem, up to this point, has been trying to put into words a philosophy that can be seen differently through any number of lenses without providing solid context. The aforementioned surge of paranoia about the perceived inevitability of the Zillow takeover of all things real estate has helped put some perspective in place to make the point.
To Answer The Question
Since I brought it up, no, I don’t believe that Zillow Instant Offers poses a very real threat to Realtors. No, I don’t think that Zillow has any intention of becoming a real estate broker and taking over the industry. I believe that Instant Offers is, plain and simply, a big name in the business reacting to a threat from smaller companies like Opendoor. That’s it. I’ll get to that later. That said, I would argue, given the way the platform is set up, that there is real opportunity with Instant Offers for agents that aren’t wasting time complaining about it.
The Real Problem
What the agents bitching about Zillow should be looking at, in my opinion, is why it’s happening, not who is doing it. The real problem is that the home selling and buying processes are arcane, intrusive, and, frankly, a giant pain in the ass. So, in walks an opportunity to take the time, stress, and hassle out of the equation and people like it. Is anyone really surprised? I mean, not to get all dramatic here, but it’s not a hard argument to make that our buyers and/or sellers often end up feeling like a victim by the time they get to the closing table.
For sellers, they have someone come into their house and tell them a bunch of stuff to fix. Then they have to keep it extra clean so a bunch of strangers can trample through at the time of their choosing. Then they usually have to negotiate offers. Then they get a professional inspector, that they don’t choose and have no oversight of, who comes in and tell them a bunch of stuff to fix. Then another professional, also not of their choosing, comes in and tells them if their home is really worth what the market clearly thinks it is. Then they finally, maybe, if another professional, that they also have no oversight of, hasn’t either lied or screwed something up, get to close. Oh, and they get to pay a bunch of money for this pleasure.
For buyers, they usually start looking online, often at sites that have significantly flawed data, yes, like Zillow (there, are you happy now?) for a home. Then someone tells them to go get a financial colonoscopy to make sure they can actually buy it. Don’t even get me started on how flawed the financial world is, specifically as it relates to “credit worthiness”. Then they get dragged around to look at a bunch of homes that usually results in that same feeling you get when your blind date doesn’t look anything like her online dating profile picture. Then they get to negotiate an offer, pay for the inspection, negotiate some more, pay for an appraisal, and possibly have to either negotiate some more or walk away after coming out of pocket for all of these things. Then, maybe, if the professionals they hired did their job, get to close.
Yep, can’t imagine why someone would want to avoid that, can you?
Disruption is Coming
When Barack Obama received the Democratic nomination for President of the United States, there was no such thing as an iPhone. Let that sink in for a second. Now, today, you go through separation anxiety if the damn thing is in the other room for five minutes. The world is changing quickly around us. Uber is quickly killing the cab and black car industries, without owning a single vehicle. Airbnb is the largest hotel operator in the world, without owning real estate. Cable companies are clinging on for dear life because of streaming media. Newspapers are closing left and right because of our need for everything on-demand. Expedia, and others like it, killed travel agents. The list goes on and continues to grow industry by industry. If you don’t believe that change is coming to real estate, please keep believing the way you do so I can take your clients when you aren’t in business anymore. Disruption is coming, and you should be ready, open-minded, and willing to identify where it might be coming from and take advantage.
Do For, Not To
So, because I’ve been waiting a really long time to get to the point these days, here it is. The industries I listed above all have one thing in common (except, maybe, newspapers, but I can make the argument both ways). They are all true service industries. I say “true” because they don’t actually sell a tangible product. Realtors like to fancy themselves as a service industry, but the truth of the matter is that we sell a tangible, consumer good. For most professionals in the industry, service may be what sets them apart from their competitors, but their consumer is still purchasing a brick and mortar product.
How, and when, we begin to see disruption in the consumer goods industry is still to be seen. We are seeing disruption in how the products are delivered, but not really in the products themselves, except in the electronics industry. Companies like Amazon, HelloFresh, and Shipt are dramatically changing the way we take possession of the things we buy, but aren’t fundamentally changing the actual products. I would argue that Zillow Instant Offers and Opendoor are in the same category. They are changing the delivery mechanism, but not the product.
I believe that it is the responsibility of the Realtors in the market, the real professionals, to drive the change needed in this industry on behalf of our consumers and clients. In the scenarios above describing the home buying and selling processes, nearly every step of the way, the client has something being done to them. It is time to change the thinking of the industry to a do for, not to mentality. Yes, of course I mean in the way you service your client. You should already be doing that. More importantly, though, is that we make the process a do for, not to process. Opendoor and Instant Offers are doing that for the people willing to accept their terms. If we want to have a say in how this goes down, then we need to stop running in fear of a make-believe enemy, stop the industry infighting over who controls data, and have a real discussion, with our clients involved, on how to make this process something that people actually want to be a part of when buying and selling real estate. Think about it, we would be the very first industry that didn’t have disruption done to them, but took it upon themselves to do it for them and their end-user!
And, as a side note for anyone in association leadership that might be reading this, no, we don’t need 17 committees and Presidential Advisory Groups to get this done.
Thoughts on the Search for a New NAR CEO
Dale Stinton, the CEO of the National Association of Realtors, is retiring at year’s end. After 36 years of service to the largest trade association in the United States, 12 of those as CEO, I’d say he deserves it. Whether you are a fan of his or not, I believe that Dale deserves a round of thanks from the membership. Anyone who can deal with a bunch of Realtors day in and day out for 36 years has earned my respect.
And so now the search is on for a suitable replacement. With that search has come every theory and though process on choosing the successor that you can possibly imagine Some of them are great and some of them make you question how the person putting that theory forward puts pants on in the morning, much less runs a successful, international real estate company. So, I thought I’d weigh in for the 19 of you that regularly read this and share my thoughts on what I think the National Association of Realtors should be doing, what I hope the new CEO brings to the table, and why some of the talk around the “type of person” the successor is scares the crap out of me for the future of the association.
NAR’s Core Competencies
I know that I am not alone in my bewilderment at some of the things NAR tries to do. On the other hand, some things that NAR does couldn’t be done better by anyone else, in my opinion. Here’s what I don’t need. I don’t need NAR to be my bank or my university or anything else like that. If they want to do something like that under the Member Benefits department and it costs zero dollars for a dues paying member, I am ok with it, but otherwise, no thank you.
There are four things that I believe NAR should be primarily focused on every single day for every single member. They are simple, or so it would seem, and the good news is that NAR is already above average to great in three of the four.
- Brand the R – This is the one area where NAR would rate a zero to me. I believe that they have utterly failed to not only differentiate between real estate agent and Realtor, but to show the value of the Realtor to the consumer. I listed this number one because I believe it is the most important thing NAR should be doing and they aren’t doing it. When both Zillow and Realtor.com have better advertising, you have failed. But when the Canadian Association of Realtors has better ads, you should just be embarrassed of yourself. (Seriously though, if you haven’t watched some of the CAR ads, they are great.)
- Advocate – NAR does a great job, in my opinion, of advocating at the federal, state, and local levels for the consumer and for the Realtor. It’s one of the things that they could do a better job publicizing to both the members and the public as a value to both. I’ve written about politics more than enough on this site, so I won’t go too deep here. I am writing this on a plane back from D.C. and the NAR Mid-Year Conference and Legislative Visits and can tell you, at least for the people representing Houston, that they not only know and listen to their local Realtors, but they know our issues. They know our issues, because instead of partisan politics, our issues support and protect all Americans regardless of their political leanings.
- Educate – Again, NAR does great with this. Are there opportunities for improvement, sure, but overall I think that NAR does a great job offering excellent educational resources to their members. Whether the members take advantage of those or not is on them, but they are there.
- Defend the Code – What I really wanted to write as the heading of this section is Defend the Code with Extreme Prejudice, but it just didn’t fit the flow. I want NAR and their state and local associations and the state regulatory bodies to begin working together to shred licenses of dead weight, garbage agents that are killing our brand. I know it won’t happen, but between drastically increasing the number of hours needed for license renewal and faster, stricter enforcement of the Code of Ethics and state regulations (by each state’s commission/regulatory agency) I believe we could start to weed out bad agents and brokers quickly.
The One Characteristic I Want in a New CEO
If you’ve never read my post called Realtor Tastes A Lot Like Travel Agent, it would probably help with the point I am about to make. I am a firm believer that if Realtors are going to remain a viable part of the American Dream then there must be a paradigm shift in the mentality of agents, MLS boards, and associations at every level. The bottom line is this: If we as a body are going to assume that our value is derived from having valuable information instead of providing value information, we will lose. Don’t believe me? When was the last time you had a client ask you about their Zestimate? Whether you want to believe it or not, the Zestimate, and Zillow for that matter, are relevant because the Realtor community continues to fail to provide the consumer with what they want without having to ask for it. The Zestimate is right as long as we don’t make it as easy for a consumer to get an estimate of what their home is worth.
The new CEO of NAR must understand this, embrace it with everything that they have, and drive the change needed to protect this industry for the future. They must force board consolidation in a big way. They must force local and state associations to create and aggressively market consumer-facing websites that include search, sold data (if allowed by law), VOWs, AVMs, and anything else that puts the local Realtor in the seat of the value provider, not Zillow, Realtor.com, Trulia, or any other aggregator. That’s it. That’s the number one thing I want to see in a candidate for CEO of NAR. Number one with a bullet.
On a quick side note, it would also be cool to see a member-oriented CEO. We’ve been without that since at least 2005.
What Scares Me
Between the recent T3 conference where a panel was convened, to published posts and articles, to the talk around happy hours at Mid-Year, I keep hearing something that, quite frankly, scares the shit out of me. The conversation somehow turns to something along the lines of “The new CEO should be a _______”. Insert woman, minority, young person, industry outsider, or whatever descriptive you can imagine. My personal opinion is that line of thinking is extremely dangerous. It’s going to be hard enough to find the right person without narrowing the pool. Personally, I don’t care if the person is 100 years or 35, male or female, black, white, or blue. I want the right person in place to lead the organization where it needs to go for the next 10-20 years. If someone on the selection committee or whoever it is that is going to narrow this thing down is operating with an agenda to have type x or type y of person be the next CEO, then they need to be removed immediately.
That’s it. 1234 words to tell you that I think the next CEO should be the right person for the job. You’re welcome. You’re never getting this time back.