The Broker's Bible

According to a recent study by the Harvard Business Review, as well as a 2009 report in TREND Magazine, a consumer “crisis of trust” currently exists, extending to both government and business. This crisis is evident throughout the world but to a higher degree in this country. Just watch the news to see the ample evidence of this growing trend among the American people.

Real estate has long been a relationship business—basically it is a baby-boomer model—and as a result of this change in consumer confidence, the industry will no longer be able to thrive and prosper the way it has up to now. In other words, the relationship will no longer be able to stand alone as a way to secure business; going forward, it will be based on a combination of the relationship and verifiable skills—with the emphasis on verifiable.

The way we are measured has changed. The numbers are still the numbers, of course – but the difference is the ones that matter to the people that matter – the consumer who hires us – and the agents who consider working for us. A full understanding of this fact has to penetrate management mindset and objectives.

For today’s skeptical consumer it’s no longer market share. No longer a claim to being “No. 1”. No longer being the largest or oldest company in the area. In the eyes of the consumer these numbers can all be easily manipulated and often times are. In fact, these new ‘measures’ allow large and small companies to compete on a level playing field – these measurements speak volumes about our ability to get the job done.

The company’s collective average (and an agents’ individual) Days On Market; Listings Sold v. Listings Taken; Actual Sales Price v. original List Price as compared to the general market comprise our competitive advantage going forward.

These numbers prove your competitive advantage – and may be the only advantage that counts for a mistrustful consumer.

In addition is the fact that we are working through the most challenging and complex real-estate market and overall economic conditions since the Great Depression. “The recession has directly hit more than half of the nation’s working adults, pushing them into unemployment, pay cuts, reduced hours at work or part-time jobs, according to a new Pew Research Center survey.” (Washington Post, 30 June 2010). High unemployment equals low numbers of home purchases.

Tight lending standards are also an obstacle to conducting business. Yes, lending institutions made plenty of loans that they should not have made; now these institutions deny plenty of loans that they should not deny. Lenders do not seem to be in business of lending anymore. Appraisal issues abound.

Shadow inventory continues to drive down prices—and, given their numbers (14 million nationwide at the end of 2009), they will continue to do so for the foreseeable future. As of April 2010, the national percentage of subprime mortgages in foreclosure (or at least 90 days delinquent) was 33 percent according to the Wall Street Journal.

Clearly, we in the real-estate industry have our work cut out for us.

However, in the midst of all this mess, enormous opportunity exists for real-estate companies, which now have the chance to move away from an agent-centered universe to a consumer-centered one. Such a shift will allow companies to be of service to the consumer in the ways that the consumer wants, needs, and is willing to pay for. Companies have to reinvent themselves around the consumer, not the agent. Furthermore, companies that do this will become the best places for any agent to work.