We have been talking a lot this past year about an industry at a crossroads. Our traditional brokerage models have been under indictment, and now the traditional commission structure is being scrutinized. It’s becoming largely an exercise in academia, though. Just maybe we are attacking this threat from the wrong end of the fire hose.
Rob Hahn, more familiarly known in blogging circles as Notorious Rob, recently wrote, "A broker’s brand is in the hands of the weakest, least competent agent." While we are out addressing the woes of the real estate world, we would each do well to etch these words into our foreheads.
I’ll do Mr. Hahn one better. The agent’s brand is in the hands of the weakest, least competent agent.
Sure, as real estate agents we are regulated. We are tested, we are licensed, and we are thumb-printed. Now in California, our license numbers must appear on all of our "first point of contact" marketing materials as a nod to the concept of consumer protection, but not until June. (I guess it takes time to implement such bold, sweeping changes.) And then we are set free to roam the earth and do whatever we please in whatever way we might wish under the banner ad of delivering the American dream.
So far so good, but this is where everything becomes backwards. The familiar employer-employee relationship is replaced with an industry of anarchy. Brokers may control the boardroom, but the licensees are calling the shots. The 1099 system turns the food chain on its head. Agents have been compared to plankton feeding a sea of bigger fish — brokers, technology companies, and a long list of settlement and other service providers — but agents are really the hunters and gatherers (or as some might call us, the predators) upon which an entire industry relies for their share of the spoils. And it is ultimately the licensees who are making this bed in which we all must lie.
The traditional brokerages are partly to blame, certainly. We are entrenched in a backwards system of agents interviewing and hiring their "employers," and the agent’s choices are limitless. The brokerages make money because of the work that their agents do, and the temptation is simply too great to strip-mine a licensed populace in the pursuit of a few, shiny diamonds. Yet it is ultimately the work of each agent that reflects on every other agent and on the entire industry.
I have spent many hours on the "higher barriers to entry" bandwagon, and rest assured that I am still occupying my seat. Argue that the free market will weed out the less adept, but I seem to recall having heard that argument before. Oh yes, the banking system. And Wall Street.
It’s much more than just an issue of licensing standards. Once crowned "licensee," no minimum standards exist for job performance. There are no annual reviews, no measures for excellence other than the production board, and few consequences for bad behavior. I run a small brokerage, but I am not a corporate muckety-muck. I am first and foremost a working agent, the first point of contact, and the things I see daily from my vantage point beneath the rhetoric and on the ground continue to amaze. I see many stellar agents who hold themselves to the highest standards even while their brokers don’t, but we are all only as strong as the weakest. Tough times bring out not only the best but the worst in people, and I am seeing more of the worst lately, ranging from gray-area ethical breaches to huge storm clouds of malpractice and incompetence.
Common sense can’t be regulated, of course, and ethics, being subjective, can’t truly be prescribed in check-list form. Laziness is not a crime, and excellence will always be measured on a sliding scale of consumer expectations. But by leaving 3 million little businesses largely unmanaged, unchecked and unaccountable, we continue a dangerous precedent.
As brokers, we need to be brave enough to say it’s not OK to trash-talk other agents to customers and each other, it’s not OK to misrepresent or mislead, and it’s not OK to do half the job for which you are being paid. We need to be bold enough to insist on minimum standards for representation — from skill sets to spell-check. While we are providing training on getting the job, we need to throw in some sessions on actually doing the job. And we need to commit to quality control — to be willing to truly manage and oversee, hire and fire — not just monitor the production board.
When an agent recently approached us wanting to join our brokerage, we found ourselves having to decline. In short, we didn’t find him a good fit — for us or for the job. And you would have thought we had just told him the earth was a doughnut. The reaction was one of disbelief. The fact that the decision really wasn’t his to make just didn’t compute. Unfortunately, the next "interview" he attends will likely restore his faith in the system.
Kris Berg is broker-owner of San Diego Castles Realty. She also writes a consumer-focused real estate blog, The San Diego Home Blog.
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