What does an ant that is trying to move a “rubber tree plant” have to do with the contemporary real estate marketplace? For that matter, how does a ram that wants to topple a “billion-watt” dam figure into our current industry landscape?
Well for starters, both of these references come from that famous song “High Hopes” first popularized by Frank Sinatra, with music written by Jimmy Van Heusen and lyrics by Sammy Cahn. It was introduced in the 1959 film “A Hole in the Head,” which was nominated for a Grammy and won an Oscar for Best Original Song at the 32nd Academy Awards.
The song is about the importance of positive thinking in the face of difficult times, the need to maintain, well, high hopes and about the fact that good things happen to those who keep the faith.
We should all have high hopes about the future of our great industry.
In mid-September, Redfin, a Seattle based “new generation” real estate brokerage with operations in a dozen or so real estate markets across the country, unveiled its “Redfin Scouting Report.” In its most basic form, it’s a Web-based search that was attempting to return statistics on the professional activities and successes of real estate agents in the markets that Redfin serves. Information such as neighborhoods served, properties listed, properties sold, buyers represented, time on market and sales price versus listing price. In other arenas, these are referred to as “agent performance statistics.”
From its very beginning, the Redfin program was fraught with accuracy, data, licensing and public relations problems. The blogosphere was explosive in its coverage of events – some positive and most negative. Finally, in early October, Redfin announced that for various reasons the entire program had been scrapped.
During the short weeks of the program’s existence, pretty much the entire real estate industry reacted as if it had been struck by lightning. As one of the industry’s most articulate observers, many were drawn to the comments of Brian Boero of 1000 Watt Consulting who blogged that the Redfin product was “the most disruptive online real estate play in years.” It was in every way a classic market game-changer.
So why was this such a big deal? What is so important about agent performance statistics? Actually it is quite simple. For the past several years, consumers have made it abundantly clear that one of the most critical piece of information that would make them feel safe in the transaction is knowing something about their agent’s competence, experience and success.
Surely no one can be surprised at this disclosure. We all agree that the purchase/sale of one’s residence is the single most important financial transaction in modern life. In fact, our marketing plays on that distinction.
Is there anyone left within reach of the Internet who doesn’t attempt to research and learn as much as they can about almost every transaction, interaction or experience they enter? Forget critical things like potential spouses and cardiac surgeons. Think about more common experiences like the best $6.00 hamburgers on Yelp and $4.99 rental movies on Rotten Tomato. We live in a world where would-be diners want to know which chef is cooking before they commit to a reservation.What if this was a son, daughter or grandchild in need of a special medical procedure? Would anyone just accept whoever was on duty at the local “Doc in the Box?”
What makes this lack of disclosure even more interesting is that the industry is risking its reputation and perhaps its future financial viability in an effort to protect marginal performers, agents who are new to the industry and individuals who aren’t even agents yet.
As we have discussed multiple times before in this column, these issues are not a matter of blind loyalty to the industry. They are a matter of learning to live with the fact that in today’s real estate marketplace, the consumer is the single most powerful entity on the scene and is gaining more power and influence every day. It is a matter that, unless we align our interests with this consumer, we are paving the way for the entry of new competitors and additional government regulation on one hand and a continuing deterioration of home ownership as the centerpiece of the American Dream on the other. This is not about the status quo. It is about a new marketplace that is taking shape around us.
This being the case, and given the fact that agent background information is some of the most sought after information in the marketplace, we should give an award to whatever powers have been successful in denying the consumer this information for this long. Now that was a game-changer.
So what lies ahead? The Redfin episode, regardless of its agenda or motivation, represented an attempt to breach a perceived wall of silence. The mere fact that Redfin was willing to risk the public ridicule and abuse they are now experiencing should be sufficient evidence to establish just how important this information is to both the consumer and any inside or outside competitor.
Rather than focusing our attentions on punishing Redfin for what may well have been a botched power play and desperately seeking to raise the walls of non-transparency, we should be interacting on a whole different level. Do we really believe that we will be able to hold the line on denying the real estate consumer the very information they hold most dear at the same time as we exhaust our resources trying to convince them to re-enter the real estate marketplace so that we can support our careers, build our businesses and feed our families?
Do we understand that every time we lose one of these battles we permanently destroy another part of our already diminished value proposition?
Where is the leadership that should be gathering us to think our way though this dilemma? Where is the intellect we need to work together to solve this crisis and meet the needs of our consumers in a way that is fair and viable for all concerned?
Agent performance information is just one of a number of issues that we will be facing over the next 24 months. Today’s real estate industry is alive with bright, articulate and sophisticated people at the agent, brokerage and organizational levels. We can use these issues to both prevail and to create a more powerful, productive and profitable future for ourselves and the REALTOR® of the future.
Let’s recall the final verse of High Hopes ….
All problems just a toy balloon
They’ll be bursted soon.
There’re just bound to go pop
Oops there goes another problem kerplop.
We can meet these challenges. We can prevail. We just have to meet them with our heads together.