“Are you a real estate salesperson or a real estate advisor?”
I have asked this question hundreds of times to hundreds of agents across the Nation. And where the answer is variably different, in many cases it is still the same.
“I am here to advise my clients to make an informed, educated and advised decision that suits their budget, current and future needs.”
I take this answer at face value… call me a cynic, call me jaded, but there’s a 600 lb gorilla in the room called “commission” that contradicts this statement for many.
As a RealtorR:
- I am compensated on the volume of transactions that “close”
- My “split”, or % of the gross commission awarded to me is determined by my production, or closed volume (i.e. the more I close the higher the % of gross commission I keep).
- So in order to pay MY mortgage, car payment, grocery bills, etc. I must actually CLOSE transactions.
The quagmire that is presented here:
1. To be a true “advisor” and recommend AGAINST buying a home if it does not fit their budget, lifestyle, or current situation means that I am not going to make any money.
2. To be a true “advisor” and recommend that someone spend less money than more money on a home means that I, in turn, make less money from the transaction.
3. To be a true “advisor” and recommend that someone “hold off” on selling a home at the moment due to market conditions, net return/loss, etc. means that I am not going to make any money.
4. To be a true “advisor” and recommend someone not purchase/sell a home at this time means that I have less volume “closed” working towards an advancement in commission split.
I believe that this is one of the glaring contradictions in the current real estate brokerage model, and one that I don’t have a concrete opinion on how to fix. But that’s not what this post is about… There is raging online commentary on the commission/brokerage model of the future across the web, and this post isn’t intended to enter this arena.
Too many times have I heard the following:
“I’ve shown them 40 houses and they still won’t write a contract! I just want them to buy something!”
“I don’t know what their problem is… we’ve seen everything and they still won’t write an offer!”
“I wish they would just buy something”
You are a real estate professional. You have taken an oath to serve your clients and advise them to the best of your ability. This “advising” is not limited to the negotiation of the property and searching of the MLS, you are in the truest form, a financial planner for their current and future home situation. I apologize in advance for what is to follow, but the situation at hand absolutely sickens me.
In this video we meet Dan and his family that were lied to about the mortgage “teaser” rate that was applied to the purchase of their home. Where 98% of the agents that I know would never partake in this type of scam, the emotion is real. Dan is simply a voice and face of the American Home Buyer who had done everything right, budgeted, and saved to purchase a home for his family.
A Day in the Life
Most have dealt with or seen the aftermath of the Foreclosure process. An empty house with boarded windows, appliances, basic fixtures, and even copper piping stripped from the house. But put yourself in the above situation and think about “the day of”. Then… think about the last client you worked with. Would you wish this upon them? After the countless hours of family talk, time together in the car, discussion of kids, pets and dreams, this could be their “next step”.
Rather than vacate her foreclosed upon home, Ms. Wanda Dunn set fire to her family home before turning a gun upon herself and committing suicide. Extreme… yes. Commonplace… no. But have you ever really wondered what someone faces for the future after foreclosure? Aside from the emotional, personal and embarrassment factor of losing their home, they face the following to their credit score (courtesy of About.com)
Let’s make it a Party…
And how do some deal with the grim element of this problem? What empathy and understanding do some brokerages employ to rectify an issue that out industry “to some level – let’s be clear… SOME LEVEL” helped to create? That’s right… we hire a bus, paint it accordingly, dish out some cocktails and make it a party.
Many reading this will respond with, “Those aren’t my clients”. They might not be. But they are the stories of middle/working class families of ranging ethnicity’s that we have turned a camera on. But please don’t fool yourself as it is happening. Middle class or upper class, it is happening daily to clients just like yours.
There are exceptions to the rule just like anything else. There are those that went to developers directly without direction from an agent. There are those that took out huge lumps of equity to spend on cars, plasma TV’s and other luxuries. But there are many stories, maybe one on your block, that haven’t made it to YouTube.
All points to what infuriates me more than anything else… the blind eye of our industry and our focus on the “expendable” client base.
In a post on Agent Genius the other day, a contributor wrote about the “11 Things A New Agent Should Know”. It wasn’t necessarily a bad post, or the first that struck me in such a way, but it was timely and set me off.
Of the “11 Things a New Agent Should Know” there was not one mention, not an inkling, to market knowledge and further education. “Stay Positive”, “Be Yourself”, “Don’t be Afraid to be Wrong”, were the major points to be made. Not one, “Get to Every Training you Can”, “Learn about REO Properties or How to Avoid Foreclosure”, “Educate Yourself on Current Financing” or “Budgeting for Home Purchase”. Stay positive and don’t be afraid to be wrong… everything else will work itself out.
There is a group within the industry that I believe should be allowed to call themselves a Real Estate Advisor, and I am proud to say that I know many of them. They represent a group that is both educated and empathetic… a group that puts their clients’ needs above their own. These are the future of the industry in my uptopian-style rosy-glass future.
The two things I will end with are below:
1. To Consumers – you deserve the best. You deserve an advisor. This is the largest purchase you will probably ever make and $250,000 is still a quarter of a million dollars. Take your time and make an educated desicion.
2. To Agents – strive to be or become a real estate advisor. Take your job as serious as it truly is and understand that you are in charge of their financial future. Don’t be good be great.
The You Factor