REreflections.com

Chicken Little in Black by dbgg1979

I really like Rob Hahn and think that he’s a really smart guy- then he goes off and shows me that even being smart doesn’t help if you push off on the wrong foot.  Rob wrote a post called “Extinction Event Horizon: Real Estate” in which he takes a flying leap into space, and with his feet planted firmly in a vacuum begins to leap frog from one preposterous premise to another. I really felt that I needed to chime back with some facts and some opinions of my own. Let’s start by looking at his premises;

• Premise 1. There is an organized group of brokers that are large enough to create a meaningful national MLS. Rob quotes an article at Agent Genius revolving around the members of the Realty Alliance and their discussions at their meeting last spring. The conversation as Agent Genius reported it was less about leaving the MLS than it was about withdrawing their listings from third party aggregators like Zillow, Trulia and REALTOR.com. Edina Realty actually took the step to remove their listings from XXX just this week. Whatever you think about the third party aggregator issue, it does not signal the end of the MLS.  When even the largest and  most dominant companies in a given market  area don’t control more than 24-26% of their market (a huge share), they will not leave a vehicle to access the remaining 74%.
• Premise 2. That the lack of contention between the Realty Alliance, other Large independent Brokers and  National Franchisors is significant. The fight is over, its a non-issue for now, and the parties will move on to other strategies to achieve their business goals.
• Premise 3. “a “rebel alliance” will not simply pull out of the MLS or the Association; they will pull out of both, because they must pull out of both in order to achieve their aims of independence from existing policies and governing bodies.” Its just not needed, nor does one follow the other. Most of the large brokerages in the country are run by people who are members of NAR’s volunteer leadership. They value the organization highly and would not detach themselves from the largest PAC in the country (or debilitate it) just because they want to start their own MLS (which they don’t). Additionally they value the Code of Ethics, and the pride that active REALTORS feel in their organization. Though many of the MLS systems in the country are owned or operated (or both) by REALTOR Associations, another important reason for MLS systems to follow the model bylaws created by NAR is for the E&O insurance, and for the protection of the Legal Affairs committee when they have huge industry wide litigation, as well as having access to the world class legal minds at NAR (did you see how Laurie Janick negotiated an incredible settlement on the Civix law suit at the Mid-Year meetings?)
• Premise 4. “The existing paradigm of the MLS today is that its core mission includes helping its members market properties” That is truly not the primary purpose of the MLS. The purpose of the MLS, is, was, and will continue to be to facilitate cooperation between real estate brokers and agents. In most companies, more than 70% of their business required the cooperation of another firm. The creation of the MLS is born of our need to foster cooperation, not from our need to market properties. The MLS is a B2B system, not the most important marketing system for the real estate industry. The MLS does not bring us clients, it helps us service our clients, both buyers and sellers. In fact, it works so well that we take that function for granted and ignore it. The fact that we use versions of the MLS data to feed our marketing channels doesn’t make marketing the primary function of the MLS
• Premise 5. “The most important change, then, has to be that within the Rebel MLS, there can be no such thing as Internet Data eXchange, or IDX. The whole purpose of IDX is to allow participants to use MLS data to earn a customer.” In fact, the conversation reported by AG that started this whole flight of fantasy was more about a rebellion against syndication than it was about sharing inventory with other brokers. When 90% of consumers buy their home from agents, getting your inventory out to other agents is imperative-

So while Rob’s post is timely, articulate and interesting as always (I love reading Rob’s posts) it just doesn’t have any roots in reality. That being said, he then lists some consequences that are, by themselves sort of interesting to me.

• Zillow Takes Over – I hate to say this, but we already lost this fight-property information has become so ubiquitous that it is no longer the key to contact with consumers. According to NAR’s 2008 Profile of Home Buyers & Sellers , when asked what actions they took as a result of internet home search only 27% of consumers found and chose an agent. That means that 3 out of 4 consumers chose their agents for reasons not connected to the home search. Frankly, if it were possible to remove the syndicators from the equation, it might benefit the real estate professional, but it would take a massive paradigm shift in our industry to make that happen (though I am watching the Edina situation cwith interest) and I just don’t see that happening.
• The end of Buyer Brokerage – Buyer brokerage originated because consumers were confused about who represented whom in a real estate transaction. Issues like vicarious liability, litigation resulting from dual agency (which was generally undisclosed in those days), and growing consumer demand (in many instances from consumer advocacy groups) created buyer brokerage which became codified with the advent of the ABR designation. Today most states have legislation regarding buyer and seller agency, so this part of the business is just not going away regardless of MLS issues. On a practical level, more young agents count potential buyers in their spheres of influence than any other type of real estate consumer, and buyers seek agents to help them in their complicated transaction, so working with buyers that aren’t the listing agent is again a part of the bedrock of the real estate business.
• Mass Extinction of Vendors – Real Estate is a business that generates a lot of money and has tons of practitioners. There have always been, and will continue to be people who sell stuff to that large market. We wouldn’t have fewer vendors, we would have different vendors. I would expound on that, but it seems to obvious to me to need explanation.
• The End of Associations as We Know Them – This is so wrong, and indicates so little understanding of the history and function of our trade associations on all levels, that its difficult to know where to begin. Do we start with the Code of Ethics, and the benefits it provides to members? The REALTOR movement, by its creation and adoption of the COE has established the standard of practice and professional care for real estate professionals for the past 98 years. Arbitration proceedings alone have saved members millions upon millions of dollars of legal fees, and resolved business issues more rapidly than any courts. Our local state and national political advocates have helped create a usable space for real estate professionals to practice their trade. The National Association has provided legal and financial support to local and state associations when landmark litigation has been fought. All levels of Associations provide good low or no cost education for their members, where no one is selling them anything. And NAR, through its designations and certifications programs, offer specialized training of the highest quality with no product to sell or ax to grind, aiming solely to improve member’s businesses through specialization and professional development (Disclosure- if you didn’t know- I was the lead author in the 2010 re-write of NAR’s e-PRO certification,teach that course internationally, have been approved to teach GRI in the past,  and am currently a Certified CRB instructor as well) . And perhaps, most importantly , the REALTOR Associations are a place where professionals can gather and learn from each other in a non-threatening less competitive environment.  People that don’t get any benefit from their Association membership typically haven’t put anything into it. I can only speak from experience. The courses that I have taken, the seminars that I attended, the people that I have met, the volunteer positions I have held, and the events that I have participated in have profoundly and positively impacted my real estate career and are in part responsible for the successes I have achieved as a real estate professional. It is not an accident that people from all over the world come to NAR meetings to learn and network and bring knowledge back to their countries. NAR, the state and local associations may have their flaws, but they are an amazing resource to the industry and a major force for positive change and improvement in our industry.

Rob ended his post saying “Is all this mere Chicken Little’ing? God, I hope so.” – I think, without question , that this time Rob was running a little too quickly without all the information needed to make his predictions – which, as I remember the story is almost exactly what Chicken Little did – Luckily Rob’s a lot brighter than Chicken Little, not to mention more creative – making him an interesting guy to listen to – just don’t run for cover just yet.

Disclaimer: I am not an attorney, but I have hired lots of them and sent their children to school.

I am , sadly, no stranger to stupid lawsuits. I’ve even written about how colossally stupid many of them were, but I am now watching a lawsuit that brings ill-considered to a whole new level.

It seems that a woman in Washington state named Denise Lones decided that Daniel Rothamel (known for years as the Real Estate Zebra by virtue of his avocation as a basketball ref )  was damaging her business, which involves “branding, marketing, training, and product development” for real estate  professionals, because she used the term Zebra in some of her products. She decided that the damage was sufficient to begin a law suit against Daniel and his mother-in-law, REALTORS in Virginia.

I’m prejudiced from the start because I know Daniel and his family, and all of my observations and interactions with them have been great. Daniel is a friend and I am distressed that he is under attack. I don’t know Denise Lones, and have never had any dealings with her. She may be a wonderful person, but she attacked my friend and that makes me feel less than friendly towards her.

I don’t want to talk about the legal issues here. I read the complaint, and it seems silly and without basis to me, but hey, I’m just a real estate guy (sorry Jay Thompson , but I’ve been using that term for 40 years – guess I own the trademark). What I do want to talk about here is reputation management.

Ms. Lones styles herself as a marketing expert who “started the real estate revolution” and yet she seems to have missed the Web 2.0 and social media thing. It has been showing us, for some years now, that reputations are not crafted carefully in a board room and then presented for the public to digest. Reputation is formed by our actions on and off line and the perceptions and the conversations that take place in public. All of that is then amplified by the rapid transmittal of thought and speech through the internet.

Denise Lones is having her brand impacted by the very  public and  permanent conversation taking place around her litigation. In the last 24 hours I have seen lots of very high profile people, many of whom are national speakers and educators, write about this conflict. I have not seen one where she or her firm have been positioned in a positive manner. Certainly she will become a case study of what not to do , or at least a cautionary tale , in my own classes and presentations. How can this be good for her?

Jeff Turner wrote a post about brands in which he points out that a brand “.. is what people think of you when they hear your name. It is not your name.” I could not agree with him more, and that speaks to the issues involved here more clearly than any litigation can.

Daniel doesn’t need a logo or a nickname to be recognized – he already has a national presence and a national group of supporters. If he decides to abandon the Zebra logo and become the “real estate ref” , chances are it won;t slow him down a bit. He’ll still sell as much, list as much, and be sough after as frequently for speaking and teaching opportunities because he is an exceptional human being, not a catch phrase.

(Oh, I did mention that Daniel was a friend of mine, so if you decide that you would like to help him out, here is a link to his defense fund. You don’t have to give until it hurts, but a little something would be nice)

Related articles

• Lones Group sues Daniel “Real Estate Zebra” Rothamel (rerockstar.com)
• The Lones Group Files a Lawsuit Against Strong Team REALTORS Over a Fricken’ Zebra Stripe? (mykwblog.wordpress.com)
• Daniel Rothamel…The Real Zebra (annarborundressed.com)
• Pay Attention To Your True Brand (jeffturner.info)
• Are Zebras Endangered (chrisbrogan.com)

I’ve been thinking about writing this post all week long.

At the end of the year we all tend to contemplate the past and think about our future because of the symbolism of the arbitrary finish line our calendar provides for us.

This is the fourth recession I have endured since I entered the real estate business, and though it has been exhaustingly  long, it isn’t that different from the others I have faced. There are things that impact your business – some of them are in your control and some of them are out of your control. That actually makes success easier to achieve.

Step 1: Ignore the things that are out of your control.

You can’t correct the economy or fix the prices of the homes in your marketplace. You can’t increase the number of  buyers in your market that can obtain financing because you can’t fix their credit scores or create increased credit liquidity by yourself. So stop fussing,complaining and worrying about what you can’t control and accept the fact that every time you try to fight with reality, reality wins.

Step 2: Review what worked for you this year and what didn’t

2010 was a challenging year in the real estate business. Get some information to help you understand how you fared compared to the market. That’s the ulitmate index in a market like ours. And try to get good information from your MLS or your company. If you outperformed the market, good for you, if you didn’t outperform the market then your need to change your activities and perhaps the pace of your work effort is even more imperative.

Look at the basics of your engagement with consumers to see where you could improve. There are 4 steps to making a sale.

1. Meeting the consumer
2. Convincing the consumer to work with you
3. Demonstrating the product and assisting the buyer in making a choice
4. Negotiating an acceptable offer with the seller

What do you need to get better at? Are you working with a lot of inquiries but not getting appointments? Do you have a lot of showing but can’t get the buyer to purchase? Are you writing a lot of agreements that aren’t being closed?

There are also four steps to obtaining a listing

1. Meeting the consumer
2. Demonstrating your service to convince the consumer to work with you
3. Assisting the seller in pricing their property and preparing it for sale
4. Negotiating an acceptable offer with the buyer

What needs improvement here? Are you meeting with enough sellers? Do you have a lot of listing appointments but can’t get a signed contract? Do you get a lot of listings only to have them expire because they needed to be priced lower? Do you need to learn to say “no” to unmotivated sellers or to better p[resent offers to purchase?

Make an honest appraisal of what you do during the week. What works? What doesn’t? Make a list, and then stop doing things that are comfortable but non-productive. There are people out there making money right this minute. As you read this. You can do better if you want to.

Step 3 : Work smarter

Learn something – how to make a better presentation, how to show homes better, how to ask for the listing or sale in a more efficient manner. Take the ePro course (ok, that was a commercial, but I really believe that the course that will help people build their business) or a course in working with buyers or sellers, or attend a convention or participate in ReBarCamp, but go to whatever you choose with the goal of obtaining an actionable plan for improving what you do.

And, while I participate in remote learning both as an instructor and a student, I would suggest that you not substitute distance learning for going somewhere and focusing on learning a subject – in my opinion distance learning is best employed when you have no alternative or when you already have a strong working knowledge of the subject and the course is about enhancing your already developed skills.  That being said, its better to do something than nothing, so if remote is all you got- then make sure you get it!

Step 4: Get out of your comfort zone and improve

Unless you made more money than you knew what to do with, or you don’t care what you make from your real estate career (in which case you are wasting your time and mine reading this) you must recognize that you need to work harder, longer, smarter, and with greater determination in order to succeed. Remember that even if prices are lower, you can compensate by selling more properties. If the number of transactions in your market is less, it just means that the “pie” is smaller, and that you need to get a larger piece of the pie.

I presented on Social Media in London at the Sunday Times Estate Agents Event, earlier this month, and met a charming fellow named Sean Newman. Sean seemed to be on stage accepting awards every few minutes during the ceremony, and during an award acceptance speech he said that one of his favorite sayings was  “If you want to do something you will find a way – If you don’t want to do something you will find an excuse.” Its one of my favorites now too, and I thought a perfect motto for 2011 and beyond.

Best wishes for a Healthy, Happy, and Productive 2011.

I just got the email you see here –

I like Etacts – it was a simple easy add on to Gmail that allowed me to see the social connections of my correspondents, a list of our emails, and most importantly for me, sending an email allowed me to schedule a follow up reminder for that contact. Pretty simple, but really useful. Now that I know that they’re going away, I have re-installed Rapportive – a program which is similar but without the reminder.

To adjust to the loss of Delicious,  I exported by bookmarks from Delicious to Diigo.com, where I am writing this post . Though I loved Delicious, I am learning to enjoy Diigo, which has some functionality that Delicious didn’t have, like highlighting, clipping parts of web sits, saving graphics, and, of course, posting to your own blog from within the Diigo site.

I constantly remind people that the web is ever changing always shifting environment, and I am always prepared, as in these cases, to fold my tent, pack my bags, and move on to a place where my needs will be met. I hope you are too.

You might have heard that the economy has been challenging for real estate professionals for a while now. The media (both traditional and social) inundates us with news of economic woes, short sales, foreclosures, joblessness and the challenges of being in the real estate industry. We see people leaving the business because its become too challenging, and seeking jobs which may be less rewarding both financially and emotionally, but have some stability to them.

Business is War

In 1993 Fast Company’s Mark Fuller said “Business in the New Economy is a civilized version of war. Companies, not countries, are battlefield rivals.” Today the economy, as well as our business rivals seems to be our enemy, but there is nothing you can do about it except quit or work had to triumph. And when you make the choice, that old saw “Quitters never win and Winners never Quit” comes firmly to mind.  But you do choose who you get to be in your scenario.

Stop Being Defensive

Its not surprising that in many instances people feel besieged in this war by their “sea of troubles” and end up by creating business strategies that are reactive rather than proactive. That leads us to adopting a “bunker mentality” which is defined by the American Heritage Dictionary of the English Language as follows.

bunker mentality, noun

An attitude of extreme defensiveness and self-justification based on an often exaggerated sense of being under persistent attack from others.

In this case, the others are the economic events that pervade our consciousness, but we still end up in the defensive mind set found by soldiers who huddle in a fortified bunker, waiting for an attack to end so they may go on with their lives. We think about maintaining business rather than growing business and we avoid change for fear of making a mistake that will lose the battle for us.

So let’s go back to Shakespeare for a moment and a quick paraphrase

To succeed or not to succeed. That is the question.

Whether ’tis nobler in the mind to suffer

The slings and arrows of outrageous fortune

Or to take arms against a sea of troubles

And by opposing end them.

I know that the market throughout the country is challenging – more so in some parts of the country than others – but it is clear to me that the only way to thrive in these circumstances is to get out of your bunker – take arms against the sea of trouble and vanquish them by going on the offensive in your market. Try new marketing methods, do more of what works, and stop doing what isn’t returning results for you. Sure you’ll make mistakes, but if you are sensitive to the changes in your business, when you make a mistake you can immediately change course and try something new.

Take charge of Your Business

Every marketplace has similarities and differences and I don’t want to assume that I know yours. But I do know that if you take charge and make changes you’ll get results – some good and some bad, but each one cam be a learning experience.  And some of them are very basic.
Need more buyers? – maybe you need to rethink floor time, open houses, calling  past clients to see if they have friends who might be looking for a home, or reaching out to investors you worked with before. How about Home Buyer  tweet-ups, or Webinars, or meet ups at the local Starbucks to talk about your Market statistics?

Need more sellers? Never called FSBO’s and expireds? Now would be a great time to do that since they face the same challenges you do without the knowledge and  tools you have available to you .

Need to get your current inventory sold? Ask for price reductions every two weeks , and fire sellers who don’t want to sell badly enough to do it ant the price their home is worth.  If your properties aren’t attracting leads on the Internet, review the photos, the description or the price. To paraphrase my good friend Brian Copeland., “The first time your home is shown is on the Internet, and we want to make sure the showing goes well”

There may not be any “magic bullets” – I know that the last three recessions I endured didn’t have any, but those people who go back to basics and work hard will not only survive this market but will thrive.
But in any case, get out of your bunker and start winning your personal war.

If we’ve not met, this probably won’t mean anything to you unless you’re a dog lover.

If we’re friends, you may know that Cisco is a Black British Lab, who was a service dog for  my late wife (who spoiled him out of being a work dog, but never made him less than perfect). After my lovely wife passed away suddenly, Cisco was my roommate. He was why my house was never empty, and why I was not alone.

In June of 2009 Cisco was taken to an emergency vet because he had a bloody liquid in the sacks around his lungs and his heart. They drained 750 ml from the sack around his lung, and wanted to wait until the following Monday to remove the liquid from around his heart. The Vet, a young female doctor, told me that he had a tumor on his lung and that, while she could not determine what type of cancer it was, if it was aggressive, he might die in just a few days. Her suggestion was that she could perform lung surgery and that might resolve the problem, but there was not certainty.

In an emotional meltdown after that call, I asked a friend to speak to the vet to get some clarity on the best way to proceed. When they spoke to the Vet , they were as confused as I was about what the best choice for Cisco would be, but they suggested that I bring him home for a couple of days, take him back on Monday for the rest of the procedure, sand see what happened. That Monday, I spoke to a second Vet handling the procedure, and asked if there was anything I could do to stop the bleeding and prolong his life. He recommended a Chinese herb, which I immediately began giving to Cisco.

Poor Cisco couldn’t sleep through the nights – not because he felt bad , but because I was so nervous that I kept waking him to see if he was OK. After a week or so I took him to the University of Pennsylvania Veterinary Hospital where Cisco was examined by Dr. Mark Rondeau. Dr. Rondeau tried a biopsy, but it was inconclusive. He recommended that we keep Cisco on the Chinese herb and see what happened. The herbs seemed to stop the bleeding and Cisco  didn’t have any liquid in his body when we went back to check. After a year, we took Cisco off those herbs when he had a couple of seizures, and stopping them seemed to resolve that problem.

Its been about 17 months since Cisco had his reprieve, and we have had real quality time. When I come home, he was usually waiting at the top of the stairs when I opened the door.  When I watched TV, he laid next to me to get his back scratched or his ears rubbed, tasks I performed willingly, and I hope satisfactorily. During this time many of my friends, knowing about the close call he had,  asked about Cisco in a cautious manner, fearful of bad news. I don’t want them to have to keep worrying about that.

Last week, after returning from speaking in New Orleans, Boston, and Scranton, Cisco came back from the dog-sitter ( a family of friends that has watched our dogs as long as we have had them) with a limp. Since he’s 10 1/2 and he tends to play hard with their dogs, I hoped that he would be ok with a little rest. Instead he seemed to get worse. On Friday he was taken to the Vet and they found that his bone density was different in that leg than his other legs, and a concern about Bone cancer was raised. Yesterday Cisco went back to University of Pennsylvania and they determined that he has an aggressive and malignant cancer which is causing him pain. If I were to have his leg amputated, and he was treated with chemotherapy, he could possible extend his life by maybe 6  months. I can’t be that cruel or selfish. I know that though I am still not happy to lose Cisco, I am emotionally more prepared  than I was 17 months ago, and I am willing to undergo sorrow to forgo his going through any more pain.

So today I said Good Bye to Cisco. I can’t ever thank him enough for what he has added to my life, or what he has meant to me. I’m not clear about what I think will happen when he passes, but I’m choosing to believe that he will be with Sheila and our other dogs Pepper and Patches. In my mind and heart they are playing like puppies, making Sheila laugh and sharing the special love that bonds dogs and their human families.

Thank you all for your love and your concern.

I am at the Rosen
Shingle Resort attending ReBarCamp Orlando. If you’re in the real estate industry you may be familiar with Rebarcamps. They are peer to peer opportunities for learning and sharing.

On my Facebook profile I
Mentioned that I was going to be there, and someone wanted to know what applications there were to justify the purchase of an iPad by a real estate professional. So, being as shy as i normally am, i have decided to lead a conversation about that. Part of that thought process led me to research some tools that I might use on
Th iPad , and I came up with the blogging app I am using to write this post. It’s not a full featured blog
Editor, but it seems pretty easy to use. In fact it’s so easy I bought the full version for $1.99 so I could edit an existing post.

Once again it seems like I’m about to learn something at Rebarcamp. Thanks Guys!

August is not my favorite month.

On August 5, 2008 I lost my best friend when my wife passed away suddenly. In 2009 I lost my cousin Jane Mehl after a long battle with lung cancer, and yesterday I had another reason to dislike August.

Joe Ferrara passed away yesterday.He was only 55 years old, and his death was untimely , caused by a brain tumor. Joe was a blogger and his contributions to what is loosely known as the RE.net are well chronicled. His work as a blogger is not what compels me to write this brief note today.

Joe was much more than a blogger. He was a smart man , with a large heart and a pleasant and interesting personality. He was always pleasant to be around and added positive energy to everything he did and everyone he met. That is what I will miss, and what I think the world will miss the most.

Joe’s mind was always open to new ideas, and to  open and engaging discussion . It might seem odd that one of the things about Joe that I considered most endearing was his love of conversational arguments.

Though Joe and I met in 2008, it was at ReTechSouth in 2009 that I got to host a “cage match” discussion between him and my friend Rob Hahn. Both Joe & Rob are smart guys and like me enjoy a good principled and articulate argument.  The event was a blast for the three of us, and was well received by the audience. It was only one of many great discussions I was to have with Joe, but all were extremely enjoyable and memorable because Joe was never afraid to take a position or think about someone else’s position.

For ReTechSouth 2010 we were to reprise our “cage match”, but prior to the event I found out that Joe was going to unable to participate. Later I found out about Joe’s illness, and through his partner Scott Forcino followed his struggle through the year.

I’m not a fan of cancer . Having lost my mother to a brain tumor and my father, and sister to lung cancer, I’m too familiar with the pain of the “cancer dance” where the patient suffers the disease while the family and friends suffer with them. I hate that Joe is gone, but I hope that he is at rest.

The worst thing about losing a person is the hole they leave in the world. Joe leaves a huge hole. But as long as a person is loved and remembered, they are never truly gone- and people like Sheila and Joe are remembered by all of the people whose lives they touched and changed by their very presence.

Joe met my wife Sheila before she passed away. Like Joe, Sheila was an incredible  loving and caring person but she was also a terrific hostess. If there is a place where wonderful  people go, I know they are there today.  I love you and miss you honey, but I know you’ll welcome my friend Joe and make him at home.

You guys live in my heart and memory – and the hearts and memories of others. Miss you both.

Related articles by Zemanta

• Breaking: Joe Ferrara of Sellsius, TheClozing passes away (agentgenius.com)

I’m in San Francisco for the third ReBarCamp. As a result I got to hang out this weekend with my friend and partner  Ginger Wilcox, and spend time with her children and my friends Todd Carpenter and Andy Kaufman.

While we were having breakfast this morning Ginger asked me to read the latest post on her awesome “Blog by the Bay“. The title was “Is It wrong to Walk Away from an Underwater Mortgage”, written by George Crowe. The topic of the post was strategic default. The topic is interesting enough and struck a strong enough chord within me to require a response here ( for me, even if not for you )

If you don’t know what a strategic default is, it is a term used by people to apologize for their failure to live up to an obligation they created contractually. In other words, it describes people who are walking away from mortgage loans that they are capable of repaying.The key here is that the borrower has the ability to make the payments required by the loan, but they choose not to.

I am not a fan of strategic defaults. I can understand that people are stressed financially, but the mortgage documents don’t say that you can don’t have to pay if you get upset. I understand that the banks are being seen as the bad guys in the current economic climate, but the documents don’t say you don’t have to pay if you don’t like the actions of the lender. You borrowed the money, you bought something with it, and you’re supposed to pay back the loan.  George quotes a New York Times article:

Back in January Roger Lowenstein argued the case for strategic default in The New York Times Magazine, and he made some pretty good points:

“Mortgage holders do sign a promissory note, which is a promise to pay. But the contract explicitly details the penalty for nonpayment — surrender of the property. The borrower isn’t escaping the consequences; he is suffering them.”

I am not as familiar with mortgage lending in California or New York as I am in Pennsylvania where we sign a mortgage and a note. The mortgage document is the pledge of real property for the repayment of  debt, and the note is our personal pledge to repay the loan. Under the terms of those documents, the borrower might be liable for a deficiency judgment to return to the bank the funds that they do not recover through the foreclosure process.  But in any case, that is not a discussion of what is right or wrong, only what might be financially expedient.

Then there is the idea that “its only business” which seems to me to be another excuse. When people tell me something is business, not personal, it’s always because they are about to do something unpleasant, and they want to distance themselves from the moral responsibility for their actions. In this case, the term is being used to indicate that the decision here is a financial one, not a moral or legal one. And that’s just not the case. You can’t be moral only when its easy, or you have no real sense of right or wrong.

I don’t pretend to be able to stand in judgement of others or their actions. And I can understand the temptation to walk away from a loan because of the pressures of the economy, but your reaction to that temptation is what determines who you are.
When my late wife’s father passed away, her mom was left with debts from his business. She didn’t own a house, and was not responsible for his debts, but she worked for years to pay off each debtor. Tillie Rosen is an stand up human being. As a widow with limited resources, having only recently returned to the work force in a low paying clerical job, she made good on the obligations of her late husband (only one of e reasons I love and respect her). She could have chosen strategic default to benefit her family but she chose to scrimp and save to pay off the obligations of her late husband because she knew that was the right thing to do .

In a market like that in Marin County where Ginger works and lives, people are struggling to pay mortgages that are currently in excess of the value of their property. That’s a really tough problem, but the property was worth more when they bought it, and will probably be worth more again some time in the future.  Obviously, there is a financial benefit to the borrower if they walk away from the property and then buy another property back at the new lower value and wait for the recovery of the marketplace. But that is a financial decision, not a moral decision.  I wouldn’t blame a homeowner who was underwater and unable to make the payments for defaulting, or for “giving the keys” back to the bank through a deed in lieu of foreclosure. Those are cases of bowing to the inevitable. But for a member of the privileged class, who has a loan that they don’t want to pay, because the thing they bought went down in value? That’s just not right, at least in my opinion. Its not fun, but living up to the promises you make in life is always the right thing to do .

In closing his post George says:

If you buy into the argument that it was the irresponsible and greedy behavior of the banks that brought about the housing bubble and corresponding bust, then maybe it’s fair that they’re left holding the bag. It’s a tough question with no easy answer. What do you think?

Since the banks were not  partners in profit when  properties went up in value during the boom they should not be expected to be partners in the loss of value today. They are lenders, and they lent money to willing borrowers, who in these cases were and are able to make the payments under the terms they agreed to – even if it isn’t the most expedient thing to do, it is the right thing to do.

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Allow me to start by acknowledging that the goals of Franchise organizations are not necessarily the goals of their individual franchisees.

The primary job of the Franchisor is to sell franchises, though supplying tools and systems to their franchisees is also an important goal. The primary goals of the franchisees  differ since they are all centered around their own  specific operations and the things that provide the greatest benefits to their businesses and their owners.

I saw a tweet by Chris Kieff that the Social Media Manager at Coldwell banker had responded to his Post “Oops!You Wanted a Full Answer to That Question?”, and being the Realogy franchisee that I am (in my role as CEO of CENTURY 21 Advantage Gold), my curiosity was piqued, so I headed over to check out the post and the response.

It seems that Chris Brogan had tweeted something about the new Coldwell Banker website, and Chris (Kieff)  had visited it , only to find that CB corporate’s national website only includes listings from Coldwell Banker franchisees. Kieff makes the point that this might disappoint consumers who visit the site, making them less than well disposed to the franchise. There is a whole argument here about the whether the Franchisor should be competing with their local franchisees for the limited number of eyes looking for real property, but that’s another post, so I will digress no further.

The post speaks for itself – Chris Kieff is an articulate guy who can (and does) make his own argument. And in response to the argument, something entirely new popped up for me.

The Social Media Manager for Coldwell banker, a guy named David Marine, responded to the post  in part, by saying;

We do allow consumers to see all the IDX listings in the area they search by promoting an IDX link on our results page, but this takes them to a local site of one of our Coldwell Banker affiliates and abides by the MLS display rules for that area. You’ll notice that these sites don’t have a number of the features that our site offers like video, social sharing, ability to save properties using our Home File product, etc.

Excuse me? Did he really just say :

You’ll notice that these sites don’t have a number of the features that our site offers like video, social sharing, ability to save properties using our Home File product, etc

Sort of like saying -

You’ll notice that our broker’s sites are really second rate propositions that don’t have the features  our corporate site has so we think consumers will be OK with our limited property data set etc.

I understand the need to respond to the post which placed the Coldwell Banker Corporate site in a critical light. And I think  the point they made about the various IDX feeds around the country was  important in helping people to understand their strategy, though other national franchises felt differently and have met the challenge of providing more information to  the consumer.

But where the David makes a huge faux pass is when he denigrates the sites of the brokers that make up the Coldwell Banker system. In its core, the value proposition of any franchise must include a commitment to the reputations of the participants in their system – and that is the big #Fail in this interaction. In fact, the question to me becomes “If Coldwell Banker thinks such features are valuable to their consumers (and therefore their franchisees), why have they not equipped their brokers with those systems?”

I don’t know David Marine, and I have no feelings about him pro or con, nor do I have any negative feelings towards the Coldwell Banker Brand. You probably know that I am the CEO of CENTURY 21 Advantage Gold, and therefore have my own franchisor/franchisee stories. In fact, Mr. Marine  and Coldwell Banker get points in my humble opinion for reputation monitoring, and attempting reputation management by engaging with a blogger who wrote about their brand. However I think there may be a cautionary tale here for all franchises in responding to mentions in the web 2.0 world. You can’t be sure who is reading your response and how it may affect the reader. Therefore  greater thought needs to be given to the content of the response,  and additional emphasis on protecting the reputation of the franchisee and the value of the franchise tools provided to them while defending the corporate decision.

In other words guys – Don’t throw your brokers under the bus to make the brand strategy look better – in fact, don’t even look like you might be throwing them under the bus – its not going to be good for franchise sales.