You see, in this world there's two kinds of people, my friend: Those with loaded guns and those who dig. You dig.
This comes from Clint Eastwood's character in The Good The Bad The Ugly. A mezmerizing movie when I happen to come across it on some cable channel from time to time. I always wait for this quote even if it takes hours to get there (depending on how edited the movie is).
Of course earlier in the movie the character that Eastwood was talking to had this to say to him.
There are two kinds of people in the world, my friend: Those with a rope around the neck, and the people who have the job of doing the cutting.
Now this brings me to the point of this post. The real estate business is changing right before our very eyes. It wasn't all that long ago that many brokers and others who basically controlled the method of business in real estate were the ones talking about ropes around the neck and doing the cutting.
I'm talking of those who always demanded a 6% commission from the sellers and offered very little latitude to the agents that perhaps wanted to freely negotiate with their client for the service. I'm talking about the agents and brokers that told buyers that the service the client will receive is 'free'. I'm also talking about the agents and brokers that demand that the MLS must be protected at all times, to control every aspect of the data so that only Members of the MLS have access to information to force the public to hire a Realtor/Member for buying and selling. You can throw in the group of practictioners that want to and practically demand that they represent both sides of a transaction on behalf of the buyer and seller.
When I entered this business almost 6 years ago (wow, time is flying by) I think I was on the tail end of the time when I would have had the rope around my neck. At no fault to my then employing broker (I just didn't know any better) I immediately began thinking of different business plans for my own real estate practice. Oh I've had hundreds of wild thoughts. My problem was I didn't know any better and didn't think the rules could be broken to the way things seemed to be.
Back then there weren't a ton of agents that I knew of that even had Internet web-sites. The ones I found were often crude and really didn't offer anything of substance or help. Keep in mind that I'm in a smaller area population wise and new fangled technology can be one of the last places visited on it's journey. I'm sure that there were great Realtor web-sites in the 90's somewhere, and those people helped lead our industry forward with technology. They continue to deserve credit.
It's incredible to watch how things on the Internet have evolved for real estate agents and brokers. Just take a look at BlueRoof.com for instance. Take a look at any of the blogs listed on my blogroll. Watch how we are all learning, growing, getting better, inventing... on behalf of the client. To me, these are the people with loaded guns that Eastwood refers to in the movie. The key here is that we are improving for the client.
Nowhere are you going to find these folks with the loaded guns thinking of the commission first, but how better to serve the client so that indeed our business can increase while offering the services needed by the clients. Are we talking about hanging a rope around 6%?? No. But we are detailing our service fees and negotiating accordingly. Some in this business deserve more than 6% for a listing fee because it is easy to see they pack a punch in doing the extra things needed to sell a home.
Maybe those traditional brokers are squirming a bit, but they have to face the fact that they don't have as many in the noose any longer. I am seeing more and more local brokerages being set up that offer plenty of latitude to the agents that hang their license there. Even though I am in a RE/MAX office, I don't feel the name brand real estate companies like RE/MAX, Century 21, or Coldwell Banker are the be all and end all for clients. The Internet has allowed others to become players on the stage with the new options and beliefs that are very client centric. Now I'm not saying that the big companies don't appeal to clients or that they cannot offer a superb service, but the days grow short where the big name companies carry a certain amount of clout.
There is real honest discussion that flies in the face of traditional thinking that buyers don't pay a dime for representation in a transaction. More importantly this discussion is being held with potential clients now. Hey Mr. and Mrs. Buyer, the truth really is that you pay all the commissions in the transaction. First of all you agree to the price of a home with a seller. From that agreed upon price the seller does compensate the listing broker out of the sellers proceeds. The listing broker does then compensate the selling broker as instructed by the agreement Realtors/Members have agreed to in the MLS. But in every essence all of that compensation comes straight from the amount of money you agreed to pay for the property.
Those that would have a buyer think different are the ones cutting the rope, and again they are becoming less and less in number. It's way past time to remove yourself from the noose, realize that you have the loaded gun, and tell the rope cutter to dig.
I must be gentle with this next one. I'm talking about the rope cutter's and the MLS data. As a Member of my local MLS I can easily see myself sticking up for, and actually being a rope cutter. That is when I think of myself as a Member and not think so much about the party that actually is the most important, the client. Make no mistake the Internet does exist, it is here to stay and will improve -- evolve -- and enhance our lives long after I'm no longer breathing oxygen on this planet.
In general terms I want the data that appears on the MLS to be user friendly to other Members of the MLS. To be a sales aid to quickly identify whether or not my clients offering should be considered to a buyer working with another Member of the MLS. The data needs to be clear, concise, and helpful to my fellow Member. But it also needs to appear where buyers are searching for a property they may be interested in, whether or not the buyer has hired a representative or even plans to.
The key to this data is it must be available where buyers are looking. Hey I love my sales site (not) but I'm not foolish enough to think that some random buyer is going to hit my site to search for homes available in my market. Yes I do have an IDX link where a buyer can look at properties on the market, but I can think of hundreds of sites they'll probably find first to do some searching. I don't know... lets see... you are thinking of starting a search for a property and the first thing that pops in your head is toddtarson.com?? Hey I'm flattered but I know better. The buyer is going to try Google first (like everyone and their mother does already), Yahoo, craigslist.com, HotPad.com, Trulia.com, oh and of course REALTOR.com.
I'm involved in forming a new regional MLS in my neck of the woods currently. I'm sure that I'm playing maverick a bit, but I think right now is a perfect time to set the stage and devise a policy to share data with online search sites. I could care less if those search sites came back to me and tried to sell me some advertising to capture more leads or whatever, I do care though that my clients listing information is available for all the world to perhaps stumble across. I obviously think it is a benefit to the selling client, but I also think it is a benefit to all of the Members in the MLS. We could still control the data and limit the amount of it we let those search sites use (such as confidential information of the seller). Heck we could even charge an amount for use of the data, I know that is unlikely but still a possibility. If we did, we could lessen the cost burden on the Members.
I wish that more individuals in my business would join me in the loaded gun group before the big search sites win the game anyway and force us all to dig. Technology companies evolve at record pace while the traditional thinking of the real estate industry evolves much slower.
My last little bit in this rant is one that I think most in the real estate business have already begun to figure out how to be in the loaded gun group. I have no problems with those in the industry that can represent both sides to a transaction with professionalism and full disclosure. I do have some problems with those that still insist on showing potential buyers that have not done any searching for properties on their own, their own property listings and those listings only.
I know it still exists because I have had potential buying clients ask me if we would be seeing any other listings than my own. It simply floors me everytime. Often the perception is that I'm only going to show buyers listings that I have, many times the clients are surprised that I'm not even going to show any of my listings. I have to tell them that none of the listings I have fit their buying criteria. I'll then get the reaction that they didn't know that Realtors could show any other listing other than the listing agents.. listings.
There are some advantages to being a dual agent. Some, mostly like the fact that if I am one I can rely on the agent getting back to the other client with information... because that agent is me and I have no real excuse not to. But overall I'm not that comfortable representing both sides to a transaction. I've been taught that when I am the dual agent, my loyalty is to the transaction and I have to be 100% neutral dealing with both sides. Well, I don't think I offer my best service to a piece of paper, I'd rather offer it to a human being. Paper doesn't smile.
Oh for sure, I miss out on what many call the 'double-dip' commission, or the full commission. So what?? I still get compensated for a successful transaction and often that compensation is exactly what I negotiated in the first place. It was my expecation from the get go. Double-dipping should not be a motivating factor as a practictioner in this line of work. Delivering exceptional service to the client is all the motivation that is really needed. If you are comfortable in delivering exceptional service to both sides of a transaction and both clients are aware of the situation, that is great.
The loaded gun metaphor I know sounds kind of violent I realize, but it is derived from an old cowboy movie. Them's were depicted as violent days. Anyway, violent metaphor or not, I always try to be the one with the loaded gun because I feel I'll be doing everything I can to benefit the client. Without the client I'm not in business. Plus, it sure beats digging or having a rope around my neck.