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Regaining Our Rightful Position

Jun 22, 2014

Posted by

Charles Dahlheimer

Recognized as one of the industrys leading visionaries, Dahlheimer is publisher of The Real Estate Professional magazine and The Real Estate Executive Summary.  He co-authored Real Es Read more

We have been reading some horror stories about public opinion polls that place the real estate agent on an even lower rung of the ladder of “professionalism” than that occupied by the proverbial “used car salesman.”

An ongoing survey conducted by the California Association of Realtors indicates the degree of slippage.  In 2004, when asked “Would you use the same agent again,” 79 percent said “yes.”  In 2009, only 22 percent said “yes.”  The majority of the negative responders indicated that they were upset with both the time that it took to sell their homes (64%)  and with their ultimate selling price (51%).

Are We the "Victims" or "Enablers"?

On the surface, it seems that the economic shenanigans perpetrated on Wall Street have caused a ripple effect, with property values tanking in virtually every part of the nation.  Although only the “messenger,” the poor listing agent bears the brunt of the seller’s ire when their dreams are dashed by the cold realities of the marketplace.

So are we just victims, or are we also enablers?  In part, we can blame our current plight on factors beyond our control.  But there is a part of the problem that lies squarely at our feet as real estate professionals.

And it’s quite understandable, as agents had been riding a protracted wave through the many boom years spanning nearly two decades.  In many markets, it had become commonplace for buyers to bid each other up, often paying more than the original listed price.  Days on market was just that, “days,” not months.  Not only was abundant funding available, and at historically low rates, but lenders were bending every rule just to get the business.  In that environment, get the listing and you were almost assured of a sale.

Technology Takes Some Blame

Technology—or at least our dependence upon technology—can take some of the blame as well.  During the boom years, we focused on getting information onto our website, attracting the “eyeballs” to those sites, and then figuring out how to “automate” our response to the volume of inquiries generated by those sites.  In the process, many lost sight of the importance of “personal intervention” on the part of the professional.  When the marketplace is booming, much of the work can be thrown off to the machines.  But in the process, the role of the real estate professional was “commoditized,” much as the role of the securities broker was commoditized in the heyday of the day traders. 

Real estate was pretty easy.  And many practitioners got lost in the wave of business.  They lost their “edge.”  They lost their perspective.  And they lost sight of their primary role in the process:  as the objective counselor who kept a professional eye on the marketplace.  They lost that because it didn’t seem to matter and because no one had time to listen as they hurried to the closing table to catch the “real estate deal du jour.”

But that era has passed, and while many are struggling to keep their careers above water, now is the time when professionalism must come to the forefront. 

Professionalism Very Important Today

If ever there were an opportunity for professionalism to shine, it is today.  Sellers need to be educated about the realities of the marketplace.  We need to stop taking listings at prices that temporarily appease the seller, but contribute to the lunacy of the marketplace.  The fact is that move-up sellers are not really in a bad place today—assuming, of course, that their credit is good.  They may not be getting the prices they had hoped for just a few years ago.  But they also have the advantage of being able to buy that move-up home at a price that would not have prevailed a few years ago.  For the move-up buyer, the playing field is still pretty level.

Credit is tight right now.  And there are steps that consumers should be taking to get their credit history in order to prepare them for a loan application a few years down the road.  If they can’t qualify today, the lenders are no longer going to find a way around that.  They’re simply not in a position to buy right now.  But can these same folks become good clients down the road?  Certainly.  But only if someone convinces them to rein in their spending, adjust their lifestyle (and their dreams) to the realities of their debt capacity, and to take whatever steps necessary to clean up their credit history.  That’s quite a process.  But someone has to convince them to embark upon it if they are going to be future real estate clients. These potential future clients should be put on a “drip marketing” system that will keep the agent “top of mind” with them until they are ready to enter the marketplace.

Build Your "Financing Team"

Real estate professionals need to interview local lenders and put together teams who can conduct home buyer and home seller seminars.  There’s a lot of great credit counseling information availble online.  In addition to serving up mouth-watering “virtual tours” of today’s homes for sale, our websites should be providing links to solid market information and pointing potential borrowers to solid advice.  In the rush to market, many buyers made foolish loan choices and are now reaping the results.  And while some of those options have been pulled off the table, the current financing crunch is spawning still others.  More than ever before, if the real estate agent needs to be able to provide solid professional advice and counsel to guide potential buyers through the murky waters of financing.

While the first-time-buyer tax incentives are a thing of the past, the advantages of home ownership are still sound, including mortgage interest and real estate tax deductability, and the $250,000/$500,000 capita gains exclusions. 

During the boom years, working with rentals made little sense, as there were plenty of solid buyers to occupy our time.  However, a large segment of tomorrow’s marketplace is now growing in the hotbed of rental units.  Those folks need education, encouragement and professional couseling to move deftly into home ownership.  Another area where “drip marketing” can have a real impact on future business.

The "Good New Days" Ahead

The past few years have had a significant--and relatively permanent--impact on the landscape of the industry.  The real estate professional of tomorrow will recognize those changes and adapt marketing plans accordingly.  Like it or not, we can’t operate in “the good old days.”  But the days ahead look quite promising for those who take their professional responsibilities seriously.