I just listened to my friends Marc Davison and Teresa Boardman talk with Maya Paveza, Michael McClure & Todd Waller on their #RTB Radio Show at Blogtalkradio. They are smart, articulate, people and the chat room was filled with other really smart people so it was a fun way to spend an hour.
If you’re not in real estate or active on Twitter you might not know that #RTB stands for “Raise The Bar”, a movement of sorts (or at least a discussion) about how the real estate industry needs to achieve a higher level of professionalism.
The conversation is sometimes interesting, and the participants engage in the conversation with great passion, but parts of it seem to me to be more “Durm und Strang ” (storm and stress) than actual suggestions to improve the industry.
We have people trotting out business truisms without really knowing if they make sense. Today one of them was ” real estate businesses don’t make money, the money is made in the affiliate relationships” (I believe I am paraphrasing, but pretty accurately). That’s just not smart business. If you are a large enough real estate concern to have title , escrow, insurance or mortgage companies as part of your operation, each one needs to be profitable, or you would be better served by operating an affiliate and letting someone else lose money on the real estate company. Of course, if you are a smaller real estate firm, you may not be able to operate affiliate firms, so that logic would leave you with the option of just operating your real estate company without making a profit – a lousy option at best. The person who made the statement is a friend of mine and a smart professional person- which doesn’t mean that they cannot fall in to the trap of relying on “common knowledge”.
Though I believe that the open exchange of ideas between professionals can lead us to some very interesting places - we need to get there because we know what we’re talking about, or at least admit when we’re postulating or theorizing. In the #RTB conversation, many people talk about stuff they have no experience with, and therefore have limited understanding of – and that’s a problem.
An agent really can’t speak about running a real estate brokerage until they have opened one, run it, and know what makes it tick. To me its like coaches who talk about how to sell real estate even though they’ve never done it. And Brokers fall into similar traps when they talk about agents. To be accurate they need to put aside their business models and prejudices, not be self-serving, and remember what it was like to do that job. In other words, if we’re going to have this conversation, let’s put aside “what we think” in favor of “what we know” and develop opinions based on fact rather than pre-judgement?
The concept of raising the bar in the real estate industry isn’t remotely new. The National Association of REALTORS was created for just that reason in 1908 and our code of ethics , adopted in 1913 pre-dates all of the real estate licensing laws in the U.S. Now that’s an example of raising the bar in an industry. But that was a long term commitment based upon a desire to improve with a willingness to be held accountable through this new organization. This conversation doesn’t rise to that level at all. Don’t get me wrong, there are some very smart, passionate, well intentioned people talking about this, but in a very fragmented and disordered manner. As I read some tweets today about “thinning the herd” it struck me that the conversation was much more about “look what a poor job the other guy is doing” rather than “how can I do my job better?”.
Look, I’m all in favor of raising the bar – but I think we have to start by raising our own bars, not talking about how others need to raise theirs. Too often it seems we’re just talking about the agent or company that made us mad, or the broker that didn’t appreciate us or pay us enough. None of that is productive – whining never is. So if you’re a real estate agent, recognize that your broker is not there just to facilitate increases in your income, they are running a business and entitled to try to be profitable. If you don’t like the way your broker runs the company, go and try to have a frank talk with them first, and if that fails go open your own company. If you’re a broker and you don’t think your agents appreciate your efforts or waste the resources you provide them with , or don’t work hard enough, you have a few options. Change your company culture, hire new agents, or manage the agents you have in a more productive manner. But always remember that the relationship between broker and agent should be symbiotic not parasitic and that we each need to value our team mates and work had to be a valued member of their teams.
So if you want to raise the bar for the industry, its easy. NAR and your state and local associations are working on that every day. Contact them and volunteer. You might be surprised to find out how many other people have been working on that bar while you were talking. But I have to admit, there is part of me that really enjoys the #RTB discussion, and perhaps you think the bar should be raised some other way. So tell me, how you think the bar should be raised in the real estate industry?
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12 responses so far ↓
1 Teresa F Boardman // Mar 19, 2010 at 5:08 pm
I don’t think my points had anything to do with the bar. The conversation was more about brokerage models but you do bring up some good points here.
2 Bill // Mar 19, 2010 at 5:11 pm
T- I know – You just set such a striking example of intellect that I was moved to comment on the whole #RTB thing -
3 mayaREguru // Mar 19, 2010 at 5:27 pm
Bill darling… first off, I did not get to really make my full statement… it is not that Real Estate companies don’t make money from Real Estate, they make money from Real Estate or they would not do it, they make a significant amount from the peripherals services such as Title and Mortgage. And although I have not run a brokerage, I have worked in offices in administrative positions and accounting that permits me to see bottom line. There are some other areas of experience I have which I am not really at liberty to discuss.
I don’t think you paraphrased, but as is often the case with me and my ADOS I probably did not complete the thought, probably. =) Or, perhaps I hope I am not that much of an idiot.
No trouble here Bill.
Love ya!
Maya
4 Teresa F Boardman // Mar 19, 2010 at 5:30 pm
Bill – always the silver tongued devil. You are right I should either grow it or move on. I have done all I can here.
5 Bob Watson // Mar 19, 2010 at 10:26 pm
As an agent, owner, manager, trainer, franchise employee… I have experienced a lot in my 23 years and I have a few opinions about our business and how companies are run. Let’s forget about 80% of existing brokerages making any measurable impact in raising the bar in our lifetime. The Internet has spawned a new business model and a new breed of broker-owner who will lead the charge in raising the bar. Lean, tech/Internet/client service companies are being built from
the ground-up in cities across North America. Agents are fed up with the lack of leadership, coaching and communication in the traditional companies and are joining these companies and will serve as the groundswell for transformatonal change in our industry. We can start with the Code of Ethics and national and state guidelines but in the end it will be inherent upon the leaders in these new companies to set the standards, inform, and monitor their agents to set the bar for the future.
6 Bill Lublin // Mar 20, 2010 at 12:05 am
Maya; Love ya – and as we tweeted to each other, we both recognize that the real estate company is the engine that generates the business, the title company profit represents the largest percentage return while mortgage companies generate the lowest percentage return but the highest dollar profit. I just hate it when the need for the real estate brokerage to be profitable is minimized – even by the owners of the company. There is a large well recognized company that at one time in their history supposedly couldn’t get sold becuase the RE portion of the concern was not propfitable but was the loss leader for amazingly succesful affiliates – they corrected that by merging with a company that had no affiliates but a really good bottom line in the real estate business – but not everyone can make that good a recovery – so we need to remember our goals as business people –
Bob – I respect your passion and you rcommitment, but I would point out that your comment “The Internet has spawned a new business model and a new breed of broker-owner who will lead the charge in raising the bar. Lean, tech/Internet/client service companies are being built from” would have been the same staement I would have made 27 years ago when I opened my first office (though the Internet would probably not have been included in the statement) – We were tech focused, consumer-centric, and adapted guerilla techniques to compete with the larger brokerages and franchises in ou rarea. Fast forward 27 years later and we are the largest company of our franchise in a major east coast city – not becuase I planned that when I opened but because I didn’t ignore opportunities to grow my business and make more money for my family. I do agree with you that we all need to be responsible for raising our own bar (hence the title) but I think that if we want to change the industry, it needs to be done by the industry, becuase no one company will do that by themselves – and if I pointed out the history that makes me believe that I would get in trouble with a whole different set of folks.
T- You know that you are one of a kind and exempt from any statements I make about mere mortals either here or anywhere else in the world
7 Ricardo Bueno // Mar 20, 2010 at 12:20 am
Re: “the conversation was much more about ‘look what a poor job the other guy is doing’ rather than ‘how can I do my job better?’.”
Bill: Two things. First – you’re one smart dude. #justsayin (yes I really did just use a Twitter hashtag in my comment). I wish I knew more people like you. Second – the comment I quoted you on above is all too true. I think that whether in real estate or any other industry, as professionals, we all too often get caught up worrying about and/or criticizing the competition when really, it’s not all that constructive. Do I worry about my competition? I might keep an eye on them sure. But I’m far more interested on how I can improve myself personally and professionally so that I can accomplish my goals set for each month. If I focus on that and less on what everyone else is doing, I’m moving forward. I’m raising my own damn bar.
8 Teresa F Boardman // Mar 20, 2010 at 7:21 am
Bite me
9 Todd Waller // Mar 20, 2010 at 8:19 am
Bill,
You “might get in trouble?” For stating that we should all go raise our own bar of professionalism?
pffftt…
Where I might differ from your opinion on this is the involvement of agents in their association to raise the bar. Not that it can’t or shouldn’t be done through the associations, but that it will be ineffectual until there is a ‘tipping point’ within an organization for this kind of change.
When you consider what happened to Paula Henry and her dustup with her local board considering Google a “data scraper,” I fear there aren’t enough forward thinkers on deck.
Frankly, in our board, this discussion is kind of like spitting in the wind.
So, as the erudite Mr. Rob Hahn has put it, go out there and differentiate off the level you’ve raised your own bar and #CRUSH the competition!
Ricardo – Only reason to eye your competition is to see how far you’ve pulled away from them…
10 Susie Blackmon // Mar 20, 2010 at 8:48 am
Great reading! Luv me some good banter, especially between brilliant people. It’s an exciting time to be in the RE business. Had I not moved to ‘this’ side of the RE table, I might not have discovered my second passion.
11 Michael McClure // Mar 20, 2010 at 8:57 am
What Bob Watson said…every word of it.
12 Bill // Mar 20, 2010 at 4:15 pm
Ribeezie – thanks for the props – look forward to seeing you at #retso this week
Todd;
If you followed the Paula Henry “dust up” you would have realized that NAR reached out and flew her and Jay Thompson to the Mid Year Meetings so that they could testify as to the meet of the issue. The appropriate committee heard their concerns and made suggestions reflecting those concerns to the Board fo Dorectors, who heard them, and then , by a small margin decided to hold it to their next meeting to obtain more information. All of that is about the democratic process – sometimes the majority doesn’t want to do what you or I think is right, and we have to honor that because when we win, there are people that feel that they were right, and unheard.
If #RTB is about being the best I can be and raising the standards of the industry that way it makes perfect sense. – if you want to raise the bar through any organization whether it is our trade organization or a local state or federal legislation or regulation, you need to work with the organization to effect that change #justsayyin’
Susie: So glad to see you – look forward to #Retso
Teresa – Gladly
Michael: I’ll wait for my interview to argue Bob’s point with you
Thanks for stopping by everyone!
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