How many lightbulbs does it take to change a REALTOR? Apparently, a lot, considering we’ve been offering ideas to the industry for more than two decades. But that didn’t stop this silly conversation from occurring the other day in my class:

“Yeah, it’s been on the market for about seven months. The seller won’t lower the price and there are about a dozen properties like it – some much newer – that are being offered for less. I don’t know what to do.”

“Have you provided the seller with the comps?”

“I just did again, for the fourth time, yesterday. She just won’t see the issue – it’s the price. Buyers have a lot of choices nowadays. She keeps saying we’re not doing enough advertising.”

“Have any of the buyers provided you with that feedback, so you could show her what the buyers are saying?”

“Nothing works. I have tried everything. Say, let me ask you a question. Have you ever done that statue thing? You know, where you bury a statue upside down in the corner of the house. Do you think that would help? I hear a lot of REALTORS swear by it.”

Pop. Out goes the lightbulb. In comes the voodoo. And forever falls away any hope of developing a professional sales force out of the million or so actors playing real estate agent.

Only it’s not TV. It’s real life. We’re talking about people’s life savings. Their biggest investment – a financial commitment that will dominate their lives for years, if not decades. Mix in the legal elements – like fiduciary responsibility and zillions of other regulations – a dash of disclosure and a few flakes of Fair Housing. And the “solution” to tough situations is: Hey! Let’s do a rain dance! That will help!

Burying statues in the backyard doesn’t sell homes. Nor does listing overpriced property. Or working with buyers without pre-approval. All of this is smoke-in-mirrors – and it’s only goal is to make the REALTOR feel like they’re doing something – anything – when they otherwise would be faced with having to do the right thing, instead. What will be next? Broomsticks and Pikachu?

That’s right: Do the right thing. Now that’s an idea. A lightbulb whose time has come. Like canceling a listing agreement for your unreasonable sellers. Just co-broke it later (bring the buyer offering a substantially lower but “you know it’s reasonable” price) and stop accruing all the expenses and aggravation. Like asking the buyer “do you want to make an offer” when you’re showing them the FIRST house on your grand tour. At $4 a gallon of gas, do you really have time to drive them to seven more homes without – at least! – asking them every time if they’d like to make an offer. Like greeting people at the door of the open house, then walking through the home with them, explaining things as you go. Not letting them run amok on their ignorant own, helping themselves to the jewelry and prescription drugs, and leaving with really no idea about the home other than the “pretty colors” they saw.

Real estate is a sales business. Sales isn’t the act of “being nice enough to a seller to let them give you their listing” so you can earn a commission. It’s about taking the right listings at the right prices – market prices – so you can make the right deal. Sales is a process. It has goals – like selling someone’s home in a reasonable time frame, for a reasonable price, so you can earn a reasonable living. Sales also has skills required – such as pricing homes within the market tolerances, explaining that prices are set by the buyer, not the seller, and using the skills of recognizing a bad deal when you see one – and running away!

Don’t think I’m blaming the consumers, either. Sure, sellers are insane and buyers are idiots. But you should be so lucky to work in an industry where the consumer’s emotions dominate their purchase process. That’s a salesperson’s dream – unless they’re still dreaming that the Tooth Fairy will bring them an offer on their overpriced under-staged listing in the high tax-burden town this month. REALTORS don’t sit across the table with twenty computer science experts, technicians and IT managers, trying to explain to them why their computer equipment warrants their $500,000 investment. REALTORS don’t have to match wits with a veteran surgeon with a PhD in chemistry as they try to sell their company’s new drug benefits. No, folks, it’s houses.

Yup – bedrooms, kitchens, and your favorite: bathrooms. But while it’s not rocket science, it certainly isn’t going to sell because you positioned the furniture toward the sun. Planting totem pole in the yard won’t keep the evil spirits from overpricing it. Drawing a circle in salt around the front door and splashing some wine vinegar on the walls won’t make buyers suddenly see the “hidden value” in the home.

At some point, consumers are going to figure this out. Oh, sorry – that point was about ten years ago. That’s why they’re raising eyebrows at your commission. That’s why they’re wondering why they can’t get hold of you by email. That’s why, after seeing the photos you placed online, they’re asking you to please, please, please stick to text-based classified ads.

Am I picking on you? No. I don’t have to: the consumer is doing it plenty fine for me. Am I trying to help you see a point? Yes. It’s this: When you’re sitting in a class called “The Ultimate Technology Course” and you’ve actually spent $300 to be there and you have a 100 page workbook in front of you with dozens of sales, marketing and technology ideas, maybe, just maybe, you’ll put away your amulets and incense and pay attention for a few minutes. Possibly out there – on the vast internet, within the networks of experts like Turcotte and Brouthers and CRB and WCR – you’ll find a few skills, techniques, tools and technologies that will help you do the right things that trained salespeople do to build your business.

Otherwise, just like your statue-underground marketing strategy, it’s probably going to be lights-out for your career.

It’s time for REALTOR Associations to do something they don’t like to do: Change. Certainly, over the past two decades, I’ve watched a fair amount of “changes” at REALTOR Associations worldwide: Executive Officers have come and gone; Associations have moved to bigger, then smaller, then bigger locations; they have changed their newsletters from print to email. All of these are “changes” but none of them represent the Change I mean when I say it’s time for REALTOR Associations to change.

I mean: It’s time for them to Evolve.

Recently, the National Association of REALTORS released it’s 2008 Association Technology Study. By and large there was nothing in it to make me fall off my seat. But that’s because I’m usually already sitting on the floor when it comes to REALTOR Association technology usage. Now, in all fairness, many Associations have worked hard – at some things – but once again, the Technology Study shows us yet another “quantum delay” in the REALTOR community’s adoption of technology as a whole.

Here are a few excerpts to make the point. When asked “what was your biggest technology achievement in the last year?” these notable accomplishments were listed:

• Ability to send mass email without a large percentage being blocked
• Changed over to an electronic newsletter
• Going wireless
• Established a technology committee
• Setup online registration for classes and events

and my personal favorite…

• Developed a technology strategic plan

Yawn.

On the surface of it, these all seem like “good” accomplishments. Except that, objectively, they all should have been done five years ago. Or earlier.

How can we say that? Well, it’s simple: Most of the Association’s members have already been doing these kinds of things for at least three to five years. Really. I know, it’s hard to believe. Aren’t we all in the dark recesses of the cave together?

To clarify, I’m only talking about the Association’s members – not their “membership” – which means I’m only talking about the brokers, not the agents, and only those brokers who are actually producing serious results in the marketplace. Those are the Association’s members. Most everyone else just pays their dues during their short tenure from “new agent to no-longer-an-agent” over a year’s period.

What’s an Association to do – if the kinds of things they are just getting around to are already “old news” to their members? How will they remain relevant, critical, worthy of membership dues, if they only got around to putting their newsletter online last year?

It’s time to get serious. REALTOR Associations don’t have the luxury of making slow, small incremental changes any more. It’s really do-or-die time for most of them: Even years after Board of Choice – in which a REALTOR could choose to pay dues to any Association within their state, not just the most-local one, the majority of Associations are still servicing local agents, most of whom never attend the meetings, use the services or come to the classes. As it stands, most Associations are still mostly just lucky. And not by much, because the number of agents is dropping across the boards, so the number of dues-paying members is dropping with it.

How do REALTOR Associations get serious about change? Here are Five Focus Areas for them to start.

1. Get Radical. REALTOR Associations can’t just change a little, over time. They need to tear down the house – literally – and rebuild it. No more “renovations.” Most slow-change approaches are because the Association “doesn’t want to upset the staff” who might not have the skills to keep up. Well, either train them or part ways. Your members expect the highest levels of performance from their Associations – that’s what they are paying for – and they just won’t put up with “leaving a voice mail to register for a class” or worse – sitting in a classroom that still has a chalkboard!

2. Lead Your Members. My friend Roger Turcotte is one of the smartest persons I know. He’s not just a trusted advisor with thirty-plus years of experience in this industry. He’s a proven leader in both real estate and military careers. And for years, he has focused on a troubling issue that the industry seriously lacks: Leadership. Roger travels the world helping Associations develop their volunteer and paid leadership – to help them develop their association with a “purpose” in mind, not just a “reaction to the members”.From his lessons, I have come to the conclusion that too many Associations do not lead their members: They follow them. For proof, consider that the “changes” they made last year were already old-news to the productive brokers in their Association – who already use e-newsletters, online class registration and wireless internet to list and sell homes. Too many Associations simply “survey their members and then do what they are being told,” rather than say to their members: Watch this! We have the research (from NAR) and the brainpower (for which we are hired) and we’re going to lead you up and over the next hill! You’re not going to love it all the time, but you’re going to thank us when we get there. So stop coddling your members – especially the whiniest and the loudest and the ones who don’t sell homes so they have plenty of time to sit in committee meetings – and start telling them where you’re going and how they can come along.

3. Get Serious about Education, or Get Out of the Business. Recently, I read a news article which did make me fall off my chair. A REALTOR Association leader was quoted as saying that their members “wouldn’t like online classes” and “preferred” classroom style with a live instructor. Needless to say, they did slip in the “and we’d lose too much cash flow if we put it online” motivation for their “assessment” of their members. Now, our company teaches more than 300 live classroom sessions a year – so we know it works and we love doing it. But we also teach 2000 online seminars annually – with live instructors – and we also know that works, and is increasingly preferred by the attendees over travelling to classrooms and hotels. There is a time and place for both forms of education. And REALTOR Associations need to build deep competence in the online portion, and do it fast, otherwise they’ll be out of the education business altogether. For two reasons: The bigger brokers already offer all the live classroom training an agent needs – and for free (so how’s that for a revenue challenge?) – and the NEXT GENERATION of agents isn’t going to sit in a class NO MATTER WHAT. So it’s demographics and competition, folks. It’s time to get on or move on with your education.

4. Create a Comprehensive Strategic Plan. Associations who have “technology” plans are making the same mistake that many agents and brokers do when it comes to business: They view the “technology” portion as something “separate” from their vital, efficient operations. There is NO SUCH THING as a technology strategic plan. There is a comprehensive strategic plan for your business or Association: and it will include technology as a component that will maximize your strengths and opportunities. It cannot be separate. Technology is as “ordinary” to your strategic plan as your “marketing” or “personnel” components. Associations need to start thinking of them simultaneously – so that the operation of the Association automatically takes into account the possibilities of technology.

5. Stop SWOTting and start saying SO-WhaT! At Matthew Ferrara & Company, we have created the “anti” planning tool. Traditional strategic plans and assessments have focused on the “Strengths, Weaknesses, Oppportunities & Threats” model. Well, we think that’s junk – a total waste of time – because the emphasis always ends up on your weaknesses and threats. Never to SWOT model plans focus enough of your attention on what you CAN do WELL – and TODAY. That’s why we prefer to use our SO-WhaT model, which says: Identify your STRENGTHS and OPPORTUNITIES – and plan EVERYTHING you do around maximizing them, perfecting them, implementing them every day. Sure, we make a list of your weaknesses and threats, but ONLY so that we can quickly find ways to marginalize them, outsource them or just simply stop doing them. The idea is part of a “Strengths” movement that we learned from Marcus Buckingham and Donald Clifton’s fantastic series. The key book to read is “Now Discover Your Strengths” or visit their website. Until Association stop focusing on all of the things they can’t do well, and start focusing only on the things they can – AND SHOULD – be doing every day, they aren’t going to change. It might even be worse…

I have a lot of confidence that REALTOR Associations can change. I have seen many of them take tremendous steps – leaps, really – over the past two decades. I have watched leaders “fight” their members’ idiosyncrasies and lead them, kicking and screaming most times, to places they didn’t want to go, but are now happy to be. The challenge is simply time. Most of the innovative, leading Associations have implemented their evolutions slowly over time. They started early, so they are in a good place today. Too many Associations, however, sat around, especially during the boom-years, and “serviced” their dues-paying members rather than pushed them forward. And now, possibly, they may be out of time, and money, to become the organization they need to be for the future.

REALTOR Associations face a choice: evolve into something distinct or join the fossil-pile of the extinct. By focusing on these Five Areas of Evolution, they can choose to avoid becoming an Associationasaurus.

I just received my copy of the 2008 Annual Member Profile from the National Association of REALTORS. Amazing – just amazing – how many of you aren’t going to be around next year. But this isn’t another requiem for the change-resistant REALTOR. Believe it or not, this posting will explore a simple suggestion that NAR could implement to speed up the housing market recovery. And let’s be clear: Except for places that are still returning to market norms (some people call them “declining or falling” markets) a lot of places in America are bouncing back (or continuing along just nicely) like Des Moines, Austin and Charlotte. So for everywhere else, where the market doldrums are more media hype than market reality, it’s time for REALTORS to stop waiting around for the market to fix the consumer. It’s time to do something about it.

The navel-gazers have been shuffling around whining that the Fed, the market, the interest rates, the consumer, everyone ELSE other than the REALTOR is holding the market back. Using our famous contrarian logic, what do you think we think? Right – maybe it’s time for the REALTOR to heal thyself.

Sales is a perception-driven business. People purchase just about every non-staple good based upon some degree of emotion that can be influenced by sales professionals, marketing and other consumers. Shoppers for new cars are keenly aware of the models their friends just bought last month; and they’ll be hard pressed to overcome their emotions not to try to “keep up with the Joneses” in their purchase, too. Smart marketers play off of this; even smarter sales people leverage this emotional response – if they can learn about it – when working with their prospects.

This isn’t deceptive or sneaky. People buy things on emotion first, reason second. It may not be “right’ but that’s the human consumer for you. Most buyers will tell REALTORS that they want to get a good deal on their home, at the very same time that they are placing bids on homes that are far outside of their reasonable income levels. Sellers always protest at the REALTORS’ commission, arguing for a “deal” and discount, at the same time they are making offers on their next home that are insultingly low or pitiable. Even REALTORS make emotional decisions – such as taking overpriced listings because they “like people” or “want to be helpful” rather than reasonably backing away from the unreasonable seller as if they had seen a ghost. It’s all emotion; and only when sales people understand this can they understand that their job is to help their buyers and sellers “manage” their emotions to find or sell their most personal possession, while at the same time making sound decisions. One sound decision for sellers would be keeping a home off the market if there is no immediate need to sell it today; rather than months of anticipation and anxiety because nobody will make an offer. Another sound decision would be for buyers to start making offers now, before historically low interest rates start to climb. Remember, the Fed held rates steady yesterday. Guess where they are going after the election, to combat inflation? Up.

The media has certainly learned how to manipulate emotions. You would be hard pressed to find one story about any aspect of the housing industry that portrayed the “complete picture” or solid facts. It’s all innuendo, partial sentences, facts out of context and heart wrenching sob stories that cause consumers to become depressed and politicians to become enraged. Along the way, the media is selling like crazy – ads, sponsors, spots, fees – all based upon the fact that they can play the consumer’s emotions like a harp. (The media is just another sales industry these days; journalism is mostly reserved for rare moments on television, web or print – that none of us see because real facts don’t get sponsored by Coca Cola or Ford).

How can REALTORS – and their chief spokespersons, the National Association of REALTORS – win in such a contest? Is there a way that about a million members might be able to capture the attention – and the hearts, if not the minds – of the consumers to tell their side of the story?

Let’s return to the NAR Annual Survey of its Members. Unfortunately, the NAR couldn’t send an email to its members with this kind of information. Most of them only check their email once or twice a day – and while they are all out running around (doing what, exactly…?) only 34% of them have wireless access to email. How about getting the message out to everyone by IM? Naaah…61% of REALTORS report never using Instant Messaging – and another 21% only access it a few times a week or a few times a year.

There is one possibility, though. Apparently some of the REALTORS – somewhere, we aren’t quite sure – have started writing blogs. Now, don’t get too excited – it’s only 3% of all REALTORS who have blogs. But the math works out in a way: 3% of 1 Million REALTORS is a LOT of blogs. Imagine if 30,000 of them channeled a RSS feed from the National Association? I’d bet that very few other organziations have this kind of media reach – even if you get a press release noticed on REUTERS, it’s only going to be distributed once or twice across the news sites. With a NAR RSS feed on 30,000 sites, plus the state and local Association sites and you’ll have a tsunami of traffic.

If the feed changed a couple of times a day – with a short update or new headline – the feeds would cause natural SEO to push the topics to the top of the Googles and Yahoos. Even the major news sites would have to pick up the story – especially because they really don’t do their own research any more but just repeat other people’s pseudo-news and press-releases as if they were real facts. Go one step further, and get someone to translate the NAR messages into a few different languages, and the RSS will skip across the globe, bringing “the rest of the story” to the rest of the world. With so much of the U.S. housing market relying on currency markets and financial tools subject to international economic forces, getting the message to London and Tokyo is as important as Miami and Sacremento.

It’s absolutely incomprehensible that this isn’t already happening. The NAR sends out “weekly news” by email, but I’d put serious chips on the bet that says more “non-REALTORS” get that message than their own members. Here we have a professional trade organization with about a million members, and some 30,000 of them with the skills to push content into the blogosphere every day: Most companies would die for that kind of reach. It’s not even necessary to ask the members to write anything on their own – just get a professional writer in Chicago, who can make sure both sides of the story are being told (oh, heck, how about just the good side for a while?) and send it to the members. They can repost or push the feed without even doing a spell check.

And every day, the blogosphere and media would be hammered with the REALTOR perspective – not just the screaming political hack who never passed economics in high school, or the regulator who just wants more power over the banks, or the parroting tele-journalists who would know a real fact if it jumped off the page, like a rising mortgage rate, and bit them in the nose.

Isn’t that what NAR should be doing? Helping its members help themselves? Other than RPAC – which sadly is necessary to buy off the politicians and keep their pea-brained ideas from turning our sector of the economy into another “health care success story” – NAR should just drop everything else. MLS rules are like writing incantations to try raise the dead; MLS’s are gone – just bury them already. Code of Ethics rewrites aren’t going to help members be more professional if they can’t convince the public to buy homes. Stop looking inside the halls and fixing the plumbing; NAR, look around and figure out how you can use technology and 30,000 of your members (just to start) to tell the story that many people are still successfully selling and buying homes – and your members are the ones who should be saying so!

Here’s a cool tool I’ve been playing with for a few weeks. It’s called Viigo and it’s a RSS reader for your Smartphone. I’ve been testing it on my Blackberry Pearl (which still continues to leave my students in awe at the fact that they don’t need to carry around lunch-box sized smartphones unless their cranky old MLS mandates it) and it has worked flawlessly. So it’s time to share the product with all of you.

Oh, yes. And it’s free!

Viigo is an RSS reader. For some of us – even avid blog readers – RSS is still something we do on our “PCs” (oh, and I think even Macs can do PCs? Lou, what do you think? Can they handle them?) Modern websites and blogs can provide a “mostly text and a few graphics” in a “feed” that allows readers to subscribe to their content in a streamlined fashion. This “Really Simple Syndication” of content not only lets computer users pull in many feeds into their browser, and just scan the headlines (sort of like Google News brings in headlines and then lets you jump out to a variety of web news sources), but the RSS format permits something really special to happen: Streamlined access to website content on non-computer devices.

Like your Smartphone.

Even if your Smartphone isn’t really that smart – some basic phones without keyboards can even accept RSS feeds – the key is that the RSS content has been “stripped” down to the bare essentials, so that the simpler screens on wireless devices can display their content effectively. For those of us who remember “Associated Press” reports that used to come in on a pin-printer to the radio station, it’s the same idea: Plain text, just-the-facts data pushed onto plain-screen formats.

The beauty is that, with RSS, you can not only surf site content faster, but you can surf multiple sites faster on your Smartphone if you use a “reader.” RSS Readers are a kind of “bookmark browser” that lets you enter the URL of lots of RSS streams, then just check an “Index” of their headlines. The RSS technology (or the reader, or both) will frequently ask for “updates” of the content from the sites you have subscribed to, without asking you to “refresh” or actually visit the sites. Content is pushed from the sites regularly (or pulled by the reader every time you start it up).

So, that’s the RSS process. Now, let’s talk about Viigo. You can go to their site and download the software – or just install it  “Over the Air” (OTA) by surfing your smartphone to their site. It’s a tiny application and it installs in seconds. Viigo starts you out with some “popular” RSS feed categories or “Channels” as it calls them – such as News headlines, their own blog, a localized automobile and weather traffic feed, etc. Adding your own channels is a piece of cake – just click your menu and Add Channel. Enter the URL and presto!

Viigo has more than 5000 channels to choose from and you can create your own custom feeds from just about any site, too. Some specific channels are just too cool – such as UPS/Fedex/DHL channel which lets you track packages from your Smartphone. (All Graphics from http://www.viigo.com) All channels can have “alerts” setup to monitor new content for any “key words” you might be keeping an eye on. So if you have added a “Wall Street Journal” feed and you want to monitor the words “housing market” or “inflation” that may appear in new stories, Viigo will send you an alert when they next appear in the feed.

But wait! There’s more!

One of the features I use the most is “Send Article to Me” which instantly takes whatever page I’m reading and zaps it to me in an email. There is a “send to a friend” function, too, but I prefer to send it to myself first, then forward it to friends (so I get the relationship- building benefit of adding my signature file – grin!).

Viigo is very customizable. You can set the maximum number of articles it pulls from each feed (or all feeds) which is important if you didn’t get a large memory stick for your smartphone. Plus you can create a schedule for it to update the feeds (or it does it automatically), which can conserve battery power (or minutes, if you didn’t get an unlimited data plan on your smartphone (not so “smart”)).

When reading each posting, you can scan the basic summary, then pull in the full article in “plain text, minimal graphics” format directly into Viigo, or click to see the full website (graphics and all) in your smartphone browser. If you read articles in Viigo, there are integrated buttons to add them to Del.icio.us, Stumble It! and Digg, too, so you can save articles and share them with friends (or the world) in the blog-posting-promoting networks.

In true Boston fashion, Viigo would be considered “wicked cool!” It’s a must have for smartphone users to be connected to web content in a fast, friendly way – especially for managers who can scan headlines and zap them to agents and clients (who can send them on, too). Adding your own site to Viigo makes it easy to send your own stuff to clients by email, who may be checking up using their Smartphones, as well.

Well, I don’t know what took so long, but Microsoft finally seems to have read its emails, listened to its voice mail and talked to its customers. According to a headline over at Engadget, Microsoft is going to support Windows XP until 2013. It’s about time!

Customers worldwide are breathing a sigh of relief as the Redmond Behemoth seems to have remembered a fundamental premise of running a good business: Listen to your customers!

There’s no magic in that premise. Your customers will tell you everything you need to know to be successful. After Microsoft launched Vista, both customers and industry reviewers provided it feedback. As expected, some people hated it (usually those whose computers were manufactured by Henry Ford Senior) and some loved it (those of us who understood that an OS change means, well, some things are actually going to be different). But more and more, especially amongst corporate clients with large installations, lots of proprietary software and sometimes older hardware in the field, the message was simple: Please don’t take Windows XP away. We might get to Vista in the future, but right now, we’re happy (and in a recession, without extra finances) still using XP.

Unfortunately, Microsoft, whose engineers and sales people are rightly enamored with their own products, just wasn’t listening. They were so certain they were right, so sure they could push the change through, that they turned a deaf ear to their clients. Even after giving a little – pushing back the mandatory cut-over date for computer vendors to sell machines with Vista only – Microsoft continued on the path of most resistance. They said: Vista or Nothing!

So customers started opting for nothing.

Now, don’t get all excited. People weren’t actually switching to Mac or anything (as if) or suddenly learning Linux code (huh? I just want to type a letter…) but they were opting simply not to upgrade their systems. Microsoft didn’t lose market share to the competition with their silly blustering sales approach, but they did lose sales. Their “our way or the highway” approach forced their customers to decide they could live a little longer with their older OS.

For most customers, it wasn’t a crisis, either. Most of us do email, write blogs, do a letter or a puny spreadsheet. Hardly do most users push their computers to the limit. So Windows XP was perfectly fine. For now, we could continue getting along in our lives and business with XP. Maybe add a little more memory and drop in some extra hard drive space. Really – most of us are perfectly fine running Solitaire and watching YouTube on a four year old XP unit. So we simply decided not to upgrade. It wasn’t a crisis, for us.

Unfortunately, not upgrading WAS a crisis for the computer manufacturers, whose sales slowed rather than soared when new technology like a snazzy-new OS emerges. Under Microsoft’s sales approach, they even faced the possibility of being unable to sell units with XP on them – for emergency replacements of broken equipment out there. Certainly no home user could have purchased an unbundled computer and loaded their own copy of their old OS on it. So Microsoft caused their “other” customers – the hardware vendors – some problems too. And they just wouldn’t listen. So those customers, also, started buying less copies of Vista, because they had less machines to sell.

Finally, Microsoft got the message. Both in the market research department and the finances department. Don’t listen to your customers and you won’t have any. No listen = no sales.

This is, of course, an excellent lesson for REALTORS. How many of us are truly listening to buyers and sellers? Not too many – since less than a third of us own Smartphones (NAR’s latest numbers) and most lsitings online look ridiculous. Fuzzy images and no videos aren’t going to attract customers who say the number ONE and THREE things they want to see online are – um – PHOTOS AND VIDEOS! Hello? Is anyone listening?

Make me register to look for listings and I’ll go somewhere that doesn’t make me do it. Make me wait three days for you to get back to me by email and I’ll find someone who will answer faster – maybe just two days. Show up at my house with a printed listing presentation but try to convince me that you’re a high-tech marketer, while you can’t even turn off the ringer on your four year old cell phone and I’m going to really, really consider putting my own listing on the FSBO website.

Like Microsoft, too many REALTORS believe their own marketing materials. We are so in love with ourselves, that we even post our high school pictures on our personal websites. It’s all about US! Me! I’m cool! I’m the best! Even brokers recruit agents with ads that say: Agent – it’s all about YOU!

Um, no. It’s not. it’s about the Consumer. Sorry – but if you forget that lesson, you’re going to have to mend some broken Windows.

Just ask around your office. Agents can tell you all about mortgage rates, and the housing stats and the local number of listings on the market. But can they tell you the average age of the first time home buyer? Can they tell you how many single females bought homes last year? Or how many purchases were made by people with no children at home (as they list their 34th four-bedroom home this month…). Nope. We study homes. And rates. And other REALTORS. And we believe our own marketing hype. But we forget that the customer has their own ideas – their own needs, their own minds. And we just keep plowing on.

Don’t believe me? Then somebody tell me why – YET AGAIN – there’s still listings that look like these on REALTOR.COM today?

In our ongoing attempt to transform the real estate industry from a cottage guild angry at the internet to a technology-integrated modern production system focused on the needs of the consumer, we’re going to engage in a little myth-busting today. At one point, mankind believed the sun revolved around the earth. We soon learned that it didn’t – and that discovery made it possible for us to eventually go to the moon and beyond. What might happen if we dispel the myth that real estate agents are independent contractors?

Let’s clarify the essentials: An independent contractor has two definitions. The legal meaning is that of a worker or organization who provides services to another organization without being an employee. For example, when a home builder constructs a new home, he calls in an “independent” electrician to run the wires. The builder does not “hire” the electrician, and provide him certain obligations under the law, such as insurance, health care, unemployment insurance or training. And mostly, he doesn’t withhold his taxes and contribute half of his Social Security benefits. For most companies, this arrangement is normal, and usually occurs between two “companies” such as a software company and a marketing firm; a dry cleaner and a delivery service; a car dealer and a towing company. In the case of our builder, he says: Show up at this location; Look at the plans. We’ll agree on a price. Do the work. I’ll pay you.

The other definition of the independent contractor is the market definition: An independent contractor – according to the market – is an entity who promotes themselves as capable of completing a certain kind of service, is engaged by another company or person to do so, and is compensated upon delivery. In the market definition, neither party provides the other with an office, a cell phone, necessary tools or an email account. In practice, independent contractors bring their own tools, supplies and most importantly, know-how. A contract software programmer already knows how to use the software that another company requires him to use to create a piece of software code. A hairdresser knows how to use the scissors she will employ in the styling of customers’ hair for her affiliated salon. A landscaper will bring his own mower and trimmer to the job, with his own gas and tools just in case the equipment breaks down.

In every case, the independent contract’s most important market “feature” is his ability to bring the required “know how” of the process to the job.

None of these legal or market conditions, however, apply to the vast majority of REALTORS.

Set aside the top 10% of the industry. In that case, we are more likely to find the nearest definition of independent contractor in the business. Teams and top producing agents in any company are the best examples of service professionals who are independently trained, employ their own equipment and require little input from the “job boss” on how to get it done. Just as the builder does not have to tell the electrician how to install the breaker-box, the real estate broker rarely needs to tell the top producing agent or team how to prospect customers or close a transaction.

As for the remaining 90% of the industry (and you can go 20/80% if our analysis is already making you cry) we don’t have anything near the legal or market meaning of independent contractors. Setting aside the legal definition, for we can truly care less if Uncle Sam wishes to play wink-wink-nod-nod for REALTORS escaping the Ponzi Scheme called Social Security, let’s focus on the other side – the market meaning of these 900,000 or so “pseudo” contractors.

According to the market (and the law) they are certainly “agents,” but that only means they sat through 40-hours or so of lecture and paid their $99 fee to be anointed by the State. But are they independent contractors – like our electricians and computer programmers – to the degree that brokers should desire to work with them? More critically, do they possess the tools, training and know-how that customers require to get the job done?

Absolutely not.

In the builder-electrician example, would we ever expect a builder to risk his investment by hiring a “licensed” electrician who came with no tools and no training other than the basic principles of electricity? Why, then, does this happen in real estate? Why do brokers ask consumers to pay for brokerage services delivered by an ill-equipped contractor? For decades, brokers have recruited the majority of their practitioners from the least experienced, least trained and least equipped ranks of the labor pool. Most REALTORS do not come to the broker with the right technology – less than a third have a Smartphone, can use their laptop in a listing presentation or create virtual tours for marketing purposes. Similarly, a tiny few have completed post-license courses on marketing, business planning, customer service, technology or negotiations. And worst of all, these “sales people” have never gone through a “sales course” before being unleashed on the consumer. Not a serious one, at least.

The mythical independent agent comes to the broker and needs them to provide everything: training, tools, experience and knowledge. Even owing for the fact that a tiny percentage will be motivated to spend the time and money to complete the REALTOR GRI course, or designations like the Certified Buyer Representative or Certified Home Marketing Specialist course, the vast majority do not. Never mind completing the Ultimate Technology Certification or Integrity Selling courses – those are certainly too expensive for a fresh-faced sales person to pay for.

Does anyone else think that, when hiring independent contractors, the broker should be reviewing contractors who already have the training, tools and know-how?

So the REALTOR independent contractor is clearly a legal fiction only. Fine. Let’s assume it’s just a hoodwink on the Feds and we’re all willing to go along with it.

What about the consumers?

Imagine a typical real estate office, with one broker and a bunch of independent contractors running around. The 80% Unprepared Group is sitting in the office, waiting for the broker to provide them with a free training class, a free email account, a free set of business cards, free ads in the newspaper and even free prospect leads. Who needs competitors, with these mooches sitting around? Sure, some of them go through the motions, but are they successful? Decide for yourselves. Why do we have 50% of the current agents, in the business under five years, with no formal training in prospecting? Why do 88% of all internet leads get thrown away after 48 hours simply because “the consumer didn’t call me back”? Why are there 264 For-Sale-By-Owners trying to sell on their own within 20 miles of the center of Boston?

Consumers get this. They understand more than ever that they run a risk when they just “accept the next agent in rotation” or work with the one who was on floor-duty when they happened to call.  Consumers don’t ask for discounts on commissions if they thought they were working with someone who was skilled enough to merit that fee. Top Producers rarely cut their commissions; they command the full fee because their tools, training and know-how supports that value proposition. Agents who are just “sneaking by” using the broker’s office computer and letting the lawyers do the heavy lifting are the ones who instantly collapse under commission pressure. So maybe even the agents know this, too?

There are plenty of skilled salespeople we could be hiring into real estate. Computer, pharmaceutical and car sales people in every town come in successful varieties, with certificates of completed courses and Smartphones visible on their belts. Why are brokers still hiring people with absolutely no experience or training or even just the basic equipment? It will come as no surprise when the consumer – especially Generation X who is entering the first “move-up” phase of their real estate cycle – demands to pay less when they’re not working with the top agent in the office.

Hiring skilled sales people – or at least holding off on hiring entry-level agents until they complete rigorous training classes and invest in some minimum tools-of-the-trade – would be the best way for brokers to provide high-compensation services to consumers. And it’s not just about recruiting the top-agent from the other brokerage down the street; the sales industry is dozens of times larger than the real estate industry. There are plenty of skilled (sales and technology) candidates that would support full-fee brokerage – not to mention cross-sell the ancillary services that are the real basis of profits in most brokerages. Consumers would jump for joy if they experienced more qualified agents more often – not rank the REALTOR below lawyers and used car dealers every year.

What holds us back? For one thing, brokers have “always done it this way.” For decades, the guild has brought the unskilled apprentice into the shop and let the veterans rub-off onto them. That worked fine, when the consumer’s choices were few and the process was shrouded in mystery. Then there was that boomlet for a few years – the one where sales could be made by any licensed Vanna we could stand in front of a listing. In the hot market, more manpower was all that was needed to take advantage of historically high sales leads. No actual “sales” was going on; most of the bidding was run by the buyers themselves, leaving agents to just push the paperwork through.

Something else holds brokers back, though. It’s not just being spoiled by the good times or pining for the past. It’s an imbalance of power. Brokers do it this way because they think they need the agents to be successful. True, they need some agents to be successful. But they have forgotten that some does not mean all. Most brokers won’t fire agents because they’re really not the ones in control of their own companies. The agents are. They won’t “mandate” agents go to training or implement new technology if the agents “threaten” to leave. They won’t look at chronic non-producers and ask them to move on. As one broker put it, “What if I ask them to leave and they go to another broker and then sell $10 milllion next year?” Yeah, right. That’s really going to happen. Brokers need to do a reality check and ask themselves who really needs whom?

No, brokers aren’t insane. They’re just not in control. This isn’t an anti-agent screed, either. The electrician doesn’t tell the builder what to do; The builder sets the standards of performance and hires sub-contractrors who want to go along for the ride – usually quite profitably. Today’s brokers have it in reverse: the agents are all fighting for the rudder, leaving the broker to row all by himself. The top agents eventually jump-ship; leaving the direction to be set by a group of people who have never studied the stars and noen of which brought an astrolabe (let alone a GPS).

If brokers want to right this ship (how did we get into this naval metaphor? oh well…) they have to do three things:

1. Return to the wheelhouse. Set the standards of agent performance according to the consumer; not the standard of consumer experience according to the agent. Lay down the vision – as long as it’s one that the consumer is willing to pay for.

2. If you want to hold onto the legal fiction of independent contractors, then at least redefine the market meaning for those you choose to engage. Hire – and fire – any agents who don’t bring anything to the table. The ability to fog a mirror isn’t sufficient any more. Agents must bring their own resources – and that means equipment and money – to the party. If they won’t come to free training or pay for professional training; if they won’t purchase a Blackberry or pay for an enhanced REALTOR.COM package; if their idea of prospecting is scientifically-proven-useless newspaper classified, then the Captain must throw them overboard. Or at least put them on the dingy and send them back to shore. Otherwise, the consumer will do it for you.

The boldest brokers will go one step further; They will transform the concept of independent contractor into one of “interdependent” contractors at their company. Brokers will learn from the most successful performers right in front of their eyes: The agent teams. Top agents know they must create a division of labor. Each person on the team has a special talent, and they are focused on that every day, all day. Brokers must do the same in their organizations. Don’t expect every agent to be excellent at every stage of the process. Split up the work and activate the talent within the organziation. The Myth of independent agents has prevented real estate companies from taking advantage of efficiencies of teamwork. That’s what happened when the cottage textile industry moved to the factory method: Teams worked in the mills, empowered by technology. Each person focused on their best skills and the system created unsurpassed output.

And customers were happy. Instead of wearing only one sweater their entire lives, the customer bought three, four, five. In different colors. At different – lower and higher – prices. Once the myth of cottage industries was broken and a truly empowered team organization unleashed – under the direction and planning of the boss, employing a group of independently skilled workers – was the greatest productive period of mankind unleashed.

It’s time to put away the past and look to the future.

According to the NAR Survey of Home Buyers and Sellers (2007), buyers who search online real estate want to see the following (In order of importance):

1. Pictures
2. Property Descriptions
3. Virtual Tours
4. Area info
5. Maps
6. Agent Info

Now, most real estate agents look at this list and immediately see #6 and get all upset. What? It’s not about me? They don’t want to see my high-school photo? Oh no!

Of course, they completely skip numbers 1-3, as countless entries in our blog continue to point out that too many sellers would be better off putting their own photos online, considering the complete lack or poor quality of some of the stuff that shows up on REALTOR.COM. And yes, the average listing sheet is still pathetic, compared to some of the print marketing that other companies – like computer and car companies – send out.

Yet even if more photos get online, and we work harder to write meaningful, interesting descriptions of properties, it’s still amazing that so many listings lack video tours online. In a world where Generation X and Generation Y are constantly entertaining themselves on YouTube, you just have to wonder how REALTORS can’t yet figure out how to put at least one video tour on every listing. Just one. I mean the average twelve year old can upload a video from their cell phone to YouTube with one eye closed and a mouse tied behind his back, but professionals being paid thousands of dollars will come up with every excuse not to put videos on every listing.

Now, it’s not like just anyone is using video to sell online. I mean, sure, it’s only car companies and faucet companies that really use video to sell their goods. For example, my favorite from Mercedes Benz:

Click the picture above and you’re going to get an awesome 55 second video from Merzedes Benz that grabs your attention, teaches you something about their product – which, at about $150,000 is as much as some houses REALTORS sell – and then provide you the option of a further guided tour with the sales lady who brings you right into the front seat of the car and takes you for an online drive. Just AWESOME!

And did I mention faucet companies? Yes, that’s right: The people who make KITCHEN SINK FAUCETS sell them online with a video clip.

Look at that – it’s a FAUCET – marketed by a powerful, emotional-response evoking video.

Now, it’s perfectly understandable that most REALTORS would look at these videos and say: Hey! We don’t have that kind of production studio or graphics capability. And you know, I’d agree with that entirely. But heck, what about a simple video taken with your standard digital camera, uploaded to YouTube and inserted into your listings? Just press the “other” button on your camera and take a video. if you’re really bold, try narrating it at the same time, even. It’s understandable if you’re not ready to create such a wonderful video as this AWARD WINNING REALTOR video from Mike Lefebvre at Century 21 Commonwealth in Massachusetts:

I’d be happy with something more basic; even just a shaky vid clip of the kitchen, pan the living room and even a spin-me-around in bathroom will do. Anything, really. Just ANYTHING in motion will do!

Of course, if we don’t see more video on REALTOR listings, things might get really ugly. I already caught a lot of flak from my suggestion that REALTORS were like vending machines… People were really “offended” that I suggested they were outdated, coin-operated stand-in-the-hallway junk food dispensers. And while I stand by my initial thoughts, perhaps I was a little hasty. Maybe I picked on the wrong machine – sorry vending machines. Perhaps REALTORS without videos on their listings are not like vending machines at all.

One thing’s for sure: REALTORS without video on their listings aren’t even like gas pumps. Like these new gas pumps in the rest stop on the Mass PIke:

So, I can watch “Gas Pump TV” while I’m making a $75 gas purchase – but I can’t get a single video on most real estate listings that are asking me to pay hundreds of thousands of dollars, including the REALTORS’ commissions.

Can anyone explain that to me?

Part 1 of a 3 Part Series on Video and Real Estate by Amy Chorew.

You have less than 6 seconds to capture a visitor to your website. Can video be the key to engage the consumer? Could be, if your video is professional looking and polished. Creating good video is an art form – it gives a good first impression each and every time. If you ever need to be reminded of how bad real estate video can be, just visit YouTube and search for some real estate videos there…. Okay, real estate video is evolving…

What can we learn from industries who have already made video on their websites standard fare? First off, the types of videos we should have on our websites. Consider:

• Welcome message
• Testimonials from Top Clients saying
• Property Showcase of particular listings
• Town Profiles and other “informational” video

The consumer comes to your website from many different entry points. Not everyone finds you on a Google search (believe it or not). And you only “begin” leveraging your videos through your website: adding them to your newsletters and email campaigns will help maximize each video production. One potential entry point could be video syndication on sites like TubeMogul which lets you to post a video and then “send it” to Youtube and other sites like Blip.tv, Googlevideo, Aolvideo, Facebook and more.

Adding your videos to these sites is free and leverages the social networking aspect of Web 2.0. Make sure you fully set up your profile on these sites, too; Add your photograph and pertinent information about your company. Them make sure they can click through – and back – to your actual website.

Just for fun, go to Youtube put in your city, state and the words “real estate” and see who is marketing this way. A great example of this is done by Coldwell Banker in Massachusetts. Check out their video below.

Notice that not all real estate video has to be about “houses” to attract and inform consumers.

Also keep in mind multiple uses for your video so you have a great return on your investment. Once your videos are produced they can be packaged and marketed as:

• Banner video ads on relevant websites
• Client videos sent to potential new clients
• Video on your blog or e-newsletter
• Video clips sent to the press for new services or updates on the market.

Also consider vendors, and industry websites that might welcome your video on their website.

As with all social networking sites, never, never SELL. A topical video will get more play, increase distribution and visibility. It promotes you to expert and thought leader in your area. Your goal is to “inform and entertain. This will allow you to take advantage of the viral nature of video on the web, people who find it interesting will recommend it and send it to others.

Web video packs a punch. It can be highly engaging, keeps people there and consumers can take immediate action on what they see.

So, don’t leave them hanging. Try to include between one to four call to actions Consider some of the following:

• Send more information
• Schedule appointment
• Ask a question
• Download PDF with more information
• Share video with a friend
• Subscribe to a newsletter or listing search

Make sure you track your results so you can gain insight into your prospects and develop better content as you go.

Next up: What makes a good video? Stay Tuned!

- Amy

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Been having a great discussion with the fellow over at 4REALZ.NET over the new REALTOR.COM Home Estimator tool just released – and quite quietly, we might add, since even we techhies missed the press release (so we suspect the public did too…. and about half the REALTORS who don’t even know REALTOR.COM exists…)

Here’s his initial post and my comment summarized:

The part that seems to be missing is accuracy of the listings.

And how right he is: Now we have TWO groups offering consumers basically FLAWED MARKET ESTIMATES of their home’s values.

Now, Zillow might have started this fight, but rather than fight back, the REALTORS have once again been coopted into losing a battle on the other guys’ terms!

My initial reaction was this: Instead of just copying everyone else, maybe REALTOR.COM (and by extension, NAR) could make some decisions based upon market realities. And the reality is that Zillow (and other similar tools) are really inaccurate because the “conditions” on the ground are always so fluid that “estimates” based upon “market data” which is always stale because of “time” are really bad education for consumers. REALTORS should know better. Many consumers buy homes “regardless” of their estimated market comparable – and many sellers are able to sell for higher (or can’t sell nearly the same as a computerized estimate) because of all sorts of NON estimated items – like poorly performing schools, local tax changes, crime, etc – NONE of which can be accurately reflected by a computer. Only by REALTORS who keep up with “the full marketplace” of issues that impact homes.

And Dustin rightly replied that, well, if Zillow has already captured the public’s imagination and attention with their estimating offer, why shouldn’t REALTORS get on the bandwagon, too? He notes that if REALTORS don’t provide the public with online estimates, they’ll go somewhere else to get them.

And he’s right. To some extent.

Zillow has changed the public’s expectations and caught the real estate industry with its pants down.

In fact, that’s what most of these “so called” industry changing companies do: They just go around the slow-moving, stay-in-the-same-lane REALTORS and go direct to the public. REALTORS really do a very poor job of even RESEARCHING the public – I ask in EVERY CLASS whether ANY of the attendees has purchased NAR’s Profile of Home Buyers and Sellers – and NONE OF THEM EVEN KNOW IT EXISTS! So how are they going to invent anything – a pricing tool, a marketing tool, a new service – if they don’t know a thing about the consumer themselves.

For two decades, while internet and technology companies have wreaked havoc on the industry, the COMMON theme amongst REALTORS was “hunker down” and close the shutters! Notice the San Diego MLS this week’s “latest technology” was to create another security barrier against – GASP! – customers getting into the MLS!

So copying the “estimator tool” is still silly – because it means that REALTORS won’t actually stand up and say that the “zestimates” are wrong; Instead, they’ll say, “Hey! If you want wrong estimates of your house values, we’ll give them to you TOO!”

The last part is what I’d suggest we focus on: If everyone “knows” that most online home value estimates are WRONG, then shouldn’t we assume the PUBLIC knows they are wrong, too? Or are we just going along with Zillow’s real estimation: the consumer is an idiot? The price of a home is RARELY simply the averaging power plus/minus adjustments of MLS data, recent sales, or even tax assessments.

I’ve been in towns where the market value of property is SOARING even in THIS DAY AND AGE. For example, Des Moines. Why? Not because the REALTORS are doing anything right – or the Zestimator or MLS is either. But the local government is – and the local employers are – and the full employment numbers are pushing up wages, which are driving up home prices. NONE OF WHICH is accounted for in the estimating power of MLS, Zillow or REALTOR.COM.

Go the other way: Go to Detroit – ground zero for an utterly destroyed real estate and business marketplace. Look at this listing (click it to go to the REALTOR.COM page for it)

Now, go to REALTOR.COM’s VALUE ESTIMATOR and put in that address. Click on it and here’s what you get:

Now help me out: If I read this chart properly: The VALUE ESTIMATOR says that 3 bedroom homes in this zipcode have recently LISTED for under $50,000. That’s FIFTY THOUSAND. That’s THREE TIMES LOWER than the current listing price – although the TWO BEDROOM properties are apparently in MORE demand in this neighborhood – listing for $75,000 more (on average) than the subject property we’re looking at – and FIVE TIMES the average of significantly LARGER homes (like the 5 bedroom ones).

Now, even if it were TRUE that two bedroom homes are more “desirable” in this area, if there were FIVE bedroom homes available for ONE FIFTH THE PRICE, don’t you think there would be DOWNWARD PRESSURE on the 2-bedroom prices? Even a “little”?

This is why ALL ONLINE HOME VALUE ESTIMATORS ARE SIMPLY CRAP.

Oh, but unmercifully, I won’t stop there. Those were just the CURRENT listings. Let’s look at the RECENT SALES for the area: OOPS! There AREN’T any – either in the data or for real, we don’t know… So how can any of the information in the estimate have any meaning, if it’s not VALIDATED by sold data – which is the only true test – EVIDENCE – that any market data is correct or not….

Just do what everyone else does: Look up your own house. I live in a 1750 sq ft condo with 3 beds and 3 baths; it’s REALTOR.COM estimated at $580,000; just a condo, mind you… Three doors down on the SAME STREET is a FULL SINGLE FAMILY HOUSE with 4 bedrooms, 3 baths, 2300 sq feet and built a full hundred years after mine (1949 vs 1840) and it’s only estimated at $530,000. And he OWNS his whole yard. I just get a piece of mine on the deed… Right. And his neighbor’s house, on the corner, with the same beds, baths and lot size: $1.64 Million. That’s a mighty increase for the house next to the stop sign on the corner…

Zilly Computer! Estimates are for humans!

This is why all REALTORS should fiercely resist computerized online estimator tools. They are senseless most of the time. This tool clearly can’t reflect anything but some raw numbers we don’t really know from where… Somehow smaller homes are five times more valuable than larger ones (no, it’s not that buyers don’t want to heat larger homes because of fuel oil… they’d buy the bigger house, trust me, and put on a sweater!) It’s because these tools can’t reflect the realities on the ground – like the fact that Detroit has outrageous taxes, no local industry and people are fleeing the city for myriads other reasons.

The REALTORS might think it’s just easier to “go with the flow.” Yet the proof that even the public could care less about computer estimates is this: They STILL INSIST on pricing their property FAR ABOVE whatever the computer says – whether it’s MLS, Zillow or REALTOR.COM.

If they really believed the computer and trusted it so much, would we really have 2-bedroom homes priced five times higher than 5 bedroom homes on the market in Detroit?

LOL!

I love technology. Of course I do – I’ve built a company around it, with it, because of it. Every day our technical support call center answers thousands of calls about technology. We help REALTORS build careers with the benefits of technology. I’ve even been known to play a video game or two, in my day.

But sometimes, doesn’t technology just seem to be dumb?

I don’t mean that the people using the technology are dumb. That’s just normal: Some of us just take a little longer than others to find the scroll bar or locate the “any” key (when asked to press any key to continue…)

That’s just it. If we can press any key to continue, why do we have to press a key at all? Just do it. Don’t wait for us slow-poke humans. If there is no consequence to what key is pressed, why does the technology make us jump through the hoops? There are countless points in our day when the computer pops up a window and say, “Hey! I’m about to do this to you!” and the ONLY button it offers is “OK”. What if it’s NOT ok? Too bad – no button for “Not Ok!” Once in a while there’s an “OK/Cancel combination” but then again – Why would we cancel? If we started a process, shouldn’t the computer assume we want to do it? Stop? I want the computer to speed up!

Another example is the “Click here to stop receiving our email” links that appear at the bottom of email marketing, e-newsletters and other stuff that clutters our Inbox. Some of this stuff we have actually asked for – we signed up for a newsletter or a feed alert – and perhaps we over did it and now need to de-clutter our Inbox. Fine. But if I click a link to UNSUBSCRIBE – which means “please stop sending me your stuff” then WHY does the software need to SEND ME AN EMAIL to confirm it will STOP sending me emails? Hello? Am I the only one who thinks this is just plain dumb?

Then there’s the spell checker. What an absolute waste of computing power. Assume for a moment that most spelling errors are really typos. Yes, some of us still can’t remember “i-before-e-except-after-c” and all that jazz, but MOST of the computing typos are because they keyboard is laid out wrong (remember, it was designed to slow down typists because mechanical typewriters couldn’t keep up with the human mind/body at the time). Now, if the computer can DETECT typos, why can’t it JUST FIX THEM itself? Look, most people use less than 800 unique words in their ENTIRE lifetime. Maybe 900 if you studied Latin in high school and got a 790 on your SAT. It shouldn’t be that hard, then, for the computer to make a REALLY EDUCATED GUESS at what word you “meant” to type. Does it really think you meant to type “costumer” instead of “consumer”? I supposed if your email was @partycostumes.com it might be justified… Mostly, however, the “basic, everyday word” will do nicely, thank you. Just correct it for me. If the computer really, really must keep track, then make YET ANOTHER USELESS BUTTON on the Microsoft Word ribbon that will “reveal all instantly fixed basic everyday words” with a green squiggly line so we can “double check” the computer’s work. Otherwise, can we agree that the PURPOSE of spell check is to CORRECT the word – not to just point out how poorly we type (or spell)?

Tech dumbness isn’t only found inside the computer, either. I remember the day my old Acura TL’s navigation system was guiding me down to Ocean City, Maryland, from New Jersey – when suddenly it said: “Proceed two miles and board the ferry.” Ferry? A boat? Where’s the bridge?? Don’t you think that if BOAT TRAVEL might be involved in automobile navigation a BIG RED BOX should have appeared at the beginning of the process that said “WARNING! BOAT NEEDED TO COMPLETE YOUR TRAVEL” ? Good thing they included the “detour” button so I could then backtrack two hours and go through Wilmington…

There’s the cell phone that charges by USB; but if you connect it to your computer it says, “This USB port does not provide enough power to charge your phone. Do you wish to remain connected?” Um… Can I download some electrons if I keep connected? And the cable box that lets you setup a “scheduled” recording of your favorite program by selecting it from the on-screen programming guide. But somehow, the on-screen guide can’t tell if the network starts the program a minute early or runs it three minutes late – and you end up missing the crucial minutes of the cliffhanger episode of Lost. Not to mention the Samsung wide-screen television which comes with a remote control that is compatible with most cable boxes – EXCEPT those built by MOTOROLA – who is the exclusive provider of cable boxes for Comcast’s 24 MILLION customers. So now, like most Americans, I have TWO remote controls. I think I’d rather get up and fine tune the UHF dial again…..

Do you really want to delete? Click OK to continue…. Here’s an email to confirm you won’t get any more emails from us… You’ll need a boat to continue this route…. Your new 42-inch television is only compatible with outdated cable boxes…. Sometimes, just now and then, it makes you wonder if someone the dumb things technology makes us do isn’t the invention of some little green men who are laughing their multi-lobed heads off as the silly little humans still struggle to right-click their way through a business memo.

Perhaps I’m just getting old, but I still don’t get the fascination with the iPhone (new or old). Maybe someone can help me out? I just read the cool story at Engadget (love their site – bookmark them!). Apparently the whole universe has become star-struck again as Apple plans to release its next version – cuter, cooler, whatever – of the iPhone. And they’re about to release a software development kit so people can write software apps for it. Just about the only thing I can say about these two moves is: It’s about time. Apple must have learned its lesson about releasing the SDK, because it’s lock-down on hardware/software in the Mac personal computer end of things prevented it from dominating the universe. Remember, a “better” product can only be better if a) more people can put it to good use than competing products and b) more people can afford it. Those two things aren’t something Apple has ever been really able to do for a) business people in general and b) in terms of economy of scale (price) compared to Microsoft, HP, etc.

And that’s why I still don’t get why anyone is excited about the iPhone. Correction: Anyone over the age of 25. Look, it’s a fantastic multimedia device. Surfs the web very nice. It even makes decent phone calls. But there’s just no way that Joe Average is going to find it “easier” to manage email and corporate data (calendar, tasks, etc) with a “virtual” keyboard. Admittedly, there are 45 million Gen Y babies out there – but not all are in line to (afford) get a new iPhone. What’s more certain, however, is that hardly any business people – whose lives revolve around managing client communications on a near-instant basis – are waiting in line for the new version.

Yes, yes, it’ will now sync up with Microsoft Exchange. Woo hoo. Can someone tell me how any new “Smartphone” could possibly ever be released today that doesn’t do this in the “beta” version? Most business people have already “mentally” written off the iPhone because version one couldn’t do their corporate email (or even SMS, if I remember???)

Even if you lines up every “coolness” feature of the iPhone – and I’ll admit there are many – there’s one part of the equation that is missing: A fundamental understanding of the customer who uses a Blackberry today. And I don’t care what engineers and geeks think are cool – it’s what the customer thinks is cool. Remember, once Apple found out how quickly they ran out of young kids who could shell out $600 for their phone (and it was fast!) and then saw how many business people said, “What? A smartphone without a keyboard for five times the cost of a trust old Blackberry (or even a scratchy old Treo)?)” And that’s why no matter what else they jam into the iPhone – and how heavily AT&T subsidizes the price – it’s not going to catch on with mainstream business people.

Because it lacks a keyboard.

Look, the world today is run by 45-65 year olds (at least in business). Whether we’re selling encyclopedias or cars or computers or real estate, the money is made by Baby Boomers and late Gen X’ers. Now Boomers still can’t correctly use the right-click on the mouse (and I have 20,000 tech calls to our call center a month to prove it) and Gen X’ers (who learned to use PC’s with DOS) still hope the Function-keys will make a comeback. So Boomers “need” the keyboard – because it makes them feel safe, as in the “good old typewriter days” and Gen X’ers are SO keyboard oriented that we still use the Alt- and Ctrl-key shortcuts combinations in Microsoft Office rather than click the damn mouse. Both generations hate the touchpad (and the eraserpoint some pencil-neck created at IBM (I always wanted to write that line!)). We grudgingly use the mouse. We buried the Palm “stylus” and their bizarre hieroglyphics writing scheme. The ONLY things we like to be touch-screen are our ATM machines and navigation systems in our cars.

There’s just no way the Boomer/Xer generation is going to start smudging their way through an email reply on the cool surface of an iPhone. No matter how sensitive it is. It just doesn’t compare to the ability to click-out a quick reply one-handed with our Blackberry Pearl while maintaining the lane at 90 mph on the interstate (and drinking a cappuccino at the same time).

No keyboard means no Baby Boomers. Maybe a few “late” Gen X’ers. Just Gen Y’ers – who will be hard pressed to shell out another $200 for the new iPhone when so many others are “giving away” their Smartphones – Samsung, Nokia, Motorola (does Motorola even have a Smartphone? Oh well…)

In the end, it’s just another story of the Geeks in Love with their Gadgets. But it’s also why Apple might find itself never able to really break through the Blackberry barrier. Motorola’s Q hasn’t made a dent; and even the “first to market” Treo has slipped because their phones are bigger than a breadbox. The lesson, as usual, is to focus on the customer. Not the device. If you want to make a work of art, then you can focus on anything you like: People will look at it and say, “That’s nice.” If you want them to buy it, however, you better find out what they like – and build it from there.

And Apple has never really learned this lesson. Their superior product design (and they are admittedly wonderful) became arrogance – which isn’t necessarily a bad thing, but has clearly kept them from understanding how to bring a product to market, dominate that sector, and change the game. We can all say that Blackberries are “more quaint” with their keyboards – but as long as the customer prefers them, it’s a done deal. It’s much easier for Blackberry to add some multimedia, improve their camera, add stereo Bluetooth and all that stuff – to compete with the gadget-coolness of the iPhone – than it is for iPhone to add a keyboard. Maybe that’s why AT&T also sells Blackberries - like the new 8120 with many iPhone-like features.

The question is: What does the customer want to buy? If it’s the business sector (which dwarfs the spending power of the college grads) then someone at Apple better start doing some market research.

- PS: I typed this entire entry out on my Blackberry. With its keyboard.

Ok, here’s a totally unscientific study:

1. I bumped into a REALTOR last night at the registration desk for a conference we’ll be attending today. She was telling me that she had three offers on three properties yesterday and she has another that is coming in this morning. All are likely to be accepted. She is busier than ever!

2. A house three doors down from my home in Andover sold in under a week last month; it actually had multiple offers and it entered a bidding war (My neighbor was one of them). Two more homes within a mile just went on the market and sold within about ten days as well. NONE of these homes was a “prize” catch. In fact, one of them was so ugly, the “front door” was in the BACK of the house and only two garage doors faced the street (honest!). It’s definitely a “tear down” project.

3. Gold dropped about $25 yesterday. That tells me the dollar is getting stronger. Which means commodity prices may start to flatten or even fall. A stronger dollar means more purchasing power for the consumer, and with so much inventory at bargain prices (3 million unoccupied but built homes nationwide) there should be a buying spree going on (except that somehow REALTORS or the press or politicians can’t seem to ignite one…)

So can someone please tell me where the bad real estate market is?

Oh, if it helps, I’ll give you a hint:

1. The bad market is in places where bad deals are offered to consumers as good deals. Caveat Emptor and all of that, but consumers aren’t complete idiots, are you? If American Airlines charges you $15 to check your luggage and Southwest doesn’t, who are you going to fly? If there’s a 2 bedroom home for $300,000 on the market and a 3 bedroom one down the street for $250,000, which deal should you take? There are some markets that are broken – like Michigan entirely, where the tax laws and unemployment rate is so bad that nobody in their right mind is going to move or invest in property there. But otherwise, just because some houses aren’t selling doesn’t mean it’s a bad market. It’s just a bunch of bad deals sitting “on” the market.

2. The bad market is on the front page of newspapers and websites. Of course it is, because there isn’t much other bad news (haven’t heard too much from Iraq on the front pages, lately, have you?) And media only sells bad news. We’re obsessed with “broken, bad, sad” in this country, to the extent that even if it isn’t broken, we’ll break it (think: we tear down our successful celebrities and business leaders rather than celebrate them by publishing dirt about them). REALTORS just bought into this “worship of woe” because we thought it was the easiest way to get a government handout (think: NAR power play, increased loan limits, government bail out). Unfortunately, we drank our own poison and now we have the stomach ache to prove it. Not all of us, though: The market can’t be all that bad because some REALTORS are doing plenty of deals. Wonder why?

3. We’re inflexible. As an industry, we mostly do the “same things we’ve always done” for decades. We’re the “SUV salesman” who has enjoyed a decade of high commissions on gas guzzlers. We don’t t know what to do when suddenly the market wants economy cars and our lot is full of Hummers. No backup plan; no savings in place to make the transition and restock the lot with new, desirable inventory. We just want everything to go back “to the good old days” when MLS data was secret and customers “needed us.” We don’t like having to actually follow up with prospects or incubate internet leads more than 30 seconds. We’re shocked to find that we actually can’t make a sales presentation effectively and our open house skills would have Martha Stewart and Miss Manners fighting over who is going to spank us first. Why can’t we just go back to the “way we were”?

As for the real market, things are actually fine. REALTORS who recognize it’s the Time of the Buyer are selling homes fast and furious: There’s so MUCH inventory that if you know how to price it and promote it to BUYERS (sorry sellers! just sit there and be quiet and let the professionals do the work) you can maximize the market conditions. Some REALTORS have realized nothing is going to “come back” to how it was: there is no “returning” market. There is always just “the market that is.” And good sales people learn how to sell in ANY market.

I’d love to hear other stories from my readers about how they’re selling perfectly well in their markets. Maybe if we collect the stories here, someone will notice (not the media, of course, but maybe some consumers) that things are really quite fine in the real real estate market.

Post your stories in our Comments!

- M

I never ceases to amaze me. With the industry in turmoil – real turmoil meaning homes aren’t selling, credit is harder to come by even for good borrowers and silly groups like the Austin City Council trying to kill local real estate with local environmental-efficiency upgrades before permitting a house to sell – the REALTOR industry just keeps shooting itself in the foot. Never mind a weak dollar, shaky lenders and foreclosures undermining the markets in the states with the largest economies in the country – FL, NY, NV, and of course, California. Don’t worry about the changing generations of buyers disrupting the comfy-cozy medieval guild system we used to call the real estate business. And as for new third parties like Trulia and Zillow, they aren’t even on the radar of really disrupting the business, considering how easily they were co-opted into playing nice with the big franchisors.

Nope: Just leave it to the local MLS system to put the final nails into the coffin of good old real estate.

That’s just what’s happening in San Diego this morning, as Kris Berg, a local REALTOR and member of Prudential California reports this morning in a wonderful article (written as an open letter) on the Inman News site today (See the article or her personal blog or trackback link).

Here are just a couple of my favorite highlights, written with a wit after my own heart:

To better serve me, you recently gave me a new MLS system. You call it Tempo 5. I am writing to thank you. Although I never asked for my former and, dare I say, functional MLS to be replaced, you seemingly knew exactly what my clients and I needed….

…[S]ome bad apples were sharing their [old MLS access] with unauthorized evildoers… so I get the whole “key fob” thing … My new Security Authenticator, as you call it, is really neat. … Now no one except me can input or update my listings, including my partner, my assistant and the other agents on my team. Sometimes I can’t even update my listings…

… I love how adding a listing now involves 219 distinct input fields. While only 111 of these are mandatory, you can bet I am going to use every one….

[And my personal favorite section of her letter...]

… Now, I can’t highlight and right-click statistical reports anymore, but that’s OK. Why would I need to share this proprietary data with my clients on my Web site or blog when they can just go to Zillow? It’s our MLS, after all. Let them go find their own IDX feed and figure it out themselves!

How is it that REALTORS are still hand-wringing over the “security” of their MLS database? Hello?!?! The issue is dead. Moot. Move on! Your data is out there, gone over the ether, on any screen, in any Blackberry, spread around like to much manure it really represents (The quality of MLS data is insanely poor. Berg notes that she’s looking forward to seeing the new listing with 3000 bathrooms she just found in the MLS. And everyone knows how few photos most MLS contains. And we’re worrying about the security of this information???)

And what’s with this “security authenticator” device. I think we should make up an acronym for it: SAD. It’s just so sad that REALTORS are “fighting the good fight” against MLS data piracy, when they still haven’t figured out how to price homes to sell, stage them to show properly – or how just take their laptops to an open house so buyers can ask more questions and REALTORS can provide answers more than “I’ll have to get back to you…”

Sheesh. Of all the problems we have in this business – ANOTHER MLS SECURITY UPGRADE doesn’t seem like it’s of PARAMOUNT ISSUE, now, does it?

Well, of course it is! Especially to “committee members” who aren’t busy doing anything else right now (like selling homes or marketing online). It’s the same old story: Some old-school REALTORS think they’re losing control over their data. Quick – lock it down! Get a security guard! Bite, Fido, bite! Protect that data – because heavens forbid the consumer actually see it! What might happen then?

So the security device is really perfect: It’s a SAD reaction to a SAD strategy for being relevant in the modern real estate marketplace. Save the MLS! Save the data! Save the Alamo….. Ooops. That one didn’t work out so well, now, did it?

Believe it or not, there is a serious business analysis of this very situation. Let’s channel our inner-Drucker for a moment and we’ll quickly discern:

“Computers may have done more harm than good by making managers even more inwardly focused. Executives are so enchanted by the internal data the computer generates–and that’s all it generates so far, by and large–that they have neither the mind nor the time for the outside. Yet results are only on the outside. I find more and more executives less and less well informed (about the outside world).”

This is absolutely the trap of the “MLS-data-security-SAD” paradox that the San Diego Association of REALTORS (and many other Associations) find themselves in. They are focused on the “computer” and “the data” and “security” – all of which is simply “internal stuff.” And internal processes are only costs and efforts. Never profits. Only on the outside – in the world of the consumer, who can desire our products (our data) and compensate us for it – can profits be made.

Ironically, “securing the MLS data” is like “locking profits” outside of the REALTOR community.

Well, it’s not unexpected. At least not for us here at our company. The Security Authenticator Device is just another last-ditch effort to keep change at bay. The last gasps of outrage before the wheels of change grind it all beneath their awesome power.

Alas, the San Diego REALTORS will give it one more try: To hold on to the pre-industrial days of real estate – when every brokerage was a little cottage dotting the serene hills of a managed mercantalist marketplace. Back then, not a factory – or internet connection – was in sight to thwart the local guild with things like efficiency, immediacy or competition. In the good old days, only the “initiated few” had access to the secret comparables book of properties. Even advertising to the public was done in cryptic codes like “2BR, 3BA, LgFmRm” so that the un-anointed consumer would be forced to seek the help of a keeper of the secrets. And lo and behold! Should any of the secret society ever let a consumer touch the book – or access the MLS database – blue bolts from Heaven should strike him down with fines and sanctions. He might even be expelled from the Society of Book Keepers and MLS Preservers – a pariah forever.

It’s so sad: The last ditch effort of the REALTOR MLS is about as “medieval” as one might imagine. Is it just me, or does the “Security Authentication Device” remind anyone else of an old voodoo talisman?

Yeah, that’s going to work wonders against the internet, don’t you think?

Frequently in this column, I have argued that REALTORS have a lot to learn about selling and customer service from “professional” sales organizations. A common reference has been Zappos.com who puts at least seven photos of every pair of shoes online. Zappos proves that just because you have a large database of “inventory” there’s no excuse for not having lots of clear, informative information and images for your products. Zappos even raises the bar on “descriptions” on inventory: their writers describe shoes in terms of customer desires and needs – like “sexy, comfy, classy, etc.” This is totally unlike REALTOR home marketing, which mostly consists of “it has bedrooms, it has baths, it has a kitchen.” Zappos markets the product based upon how the buyer wants to buy it – desires and emotions – while most REALTORS market property as if they were giving a description of a car accident to a policeman.

Now someone else has upped the ante for professional sales standards: Lord and Taylor. On a recent pass through their store, I watched a Lord and Taylor saleswoman in action. My girlfriend was looking at a pair of shoes, and Ellen, the saleswoman, immediately offered to help. Pulling a PDA from her belt, Ellen flipped the shoes over and scanned a barcode on the bottom. The PDA wirelessly checked the store’s inventory, and displayed a list of sizes and colors available in that shoe model. It took four seconds, and the customer was enthralled. In fact, I had just caught this out of the corner of my eye, so I went over to ask some questions.

Ellen explained to me that their entire inventory database was accessible to her via the PDA. She could scan any garment or shoe tag and immediately see the availability and options for that item. Rather than going back to “check” and then possibly coming back with bad news for the customer, Ellen could “manage the sale” by checking inventory, and then confirming its availability or offering an alternative shoe if necessary.

Lord and Taylor had trained Ellen to integrate her technology into the sales process. Using the PDA was seamless: Ellen didn’t struggle with the device, blame it for beeping or malfunctioning and made it look completely normal. The technology was used in “just the right amount” – not too big or bulky or beeping to distract the customer, but enough to give Ellen real-time information necessary to continue the conversation with the customer.

And the customer loved it. Time was saved, rather than waiting for the salesperson to go back into the inventory room, then come out empty-handed. Instant gratification was made “more instant” – and in a bricks-and-mortar environment. Who says real stores can’t compete with online stores?

Of course, I had to take a picture. It was a perfect example of technology-empowered sales. At no time did the technology become the center of the discussion: Ellen continued to build rapport, identify the needs of the customer and create a safe atmosphere for her to describe her desires. Every time the customer suggested an option – another color, another style – Ellen immediately provided information.

Imagine if this was the experience consumers had when they talked to REALTORS by phone? Or while they were touring a few homes, and their agent had a wireless laptop with them to suggest more properties or local town information as they went along? Imagine if REALTORS actually took their laptops to work, the way Lord and Taylor trained its salespeople to integrate into the everyday practice of selling shoes?

Ultimately, the shoe had to be tried on and experienced. That’s sort of like an “open house” in real estate terms. The customer had been “enticed” by the advertising (a model shoe on a shelf) then inquired for more information (asked the sales person) who instantly replied with information (responded to the lead in real time, then provided data base to the customer immediately) while they applied sales skills to build a rapport.

Oh, yes, one more technology was applied: A credit card reader was used to purchase the shoes. Total sale: $100 in 10 minutes. Customer very happy. Salesperson very happy. At $10/minute that’s not a bad pay rate.

All because the sales person took her technology to work.

Good job, Ellen!

Prospecting Simplified with Microsoft Outlook

With a hundred emails a day, a schedule full of tasks, three listing presentations, a showing and a training class, how is a modern real estate agent ever supposed to keep up with her marketing plan? Simple, if you let technology do the work! Regular readers of this column know that there is no way to do it if you’re still generating postcards, labels and postage, but transfer your prospecting to email and follow up becomes simplicity itself. Let’s see how.

From a technology perspective, follow up marketing should take no more than 15 minutes a week. If that sounds too good to be true, read on. If agents and brokers are going to get their money’s worth from their web sites, search engine marketing and banner ad campaigns, they have to ensure follow up marketing takes place aggressively enough to maximize the potential of every lead. Even with the variety of wireless tech tools – from email-ready cell phones to mini-tablets like the Samsung Q1 – that simplify managing email on the go, too many REALTORS lack a systematic approach to converting the leads they already received last week, and the week before, and the week before, and the week before….

And that’s why the cost of marketing never seems to pay off.

To overcome this cyclical problem of maximizing every prospect you need a technological perspective. Fully 55% of consumers tell researchers at Doubleclick.net that they expect email to replace direct mail and telemarketing; that’s good news for agents who implement an email-based marketing strategy. And while there are all sorts of automated programs and online campaign tools to do email marketing for you, you may already have everything needed to start the process today.

Let’s construct a basic email marketing plan. There are three components: a folder of prospects, a weekly task reminder and a quick mass message. First, create a contacts folder in Outlook called “prospects” by clicking File/New Folder and choosing the Contacts type; name it prospects and it will be listed in your folder tree.

Now every time you reply to a new prospect during the day, you drag a copy of that prospect from your inbox into the prospects folder. Do this by holding the control-key while dragging the message from the inbox to the prospects folder. Outlook will automatically analyze the message, extract the name and email address of the contact, and create a new record for that person; just press Save. Now you are free to work with the new lead from your inbox, while having an extra copy in a general prospecting folder.

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Next, set a reminder to send a mass email every week. Do this by opening the Outlook calendar. Click New/Appointment and title it “General Prospecting” in the subject line. Click the Recurrence button, check off weekly and select Monday; the default is for No End Date which means you’re going to have to deal with this activity every week you’re trying to stay in business. Save the appointment into your calendar.

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Each week, when the appointment pops-up, here’s what you do. Open a new email message and write a short follow up message. Don’t make it complicated or too wordy. A short message on market conditions, a quick description of a new listing or some helpful advice for new buyers is all it takes. Don’t get too fancy or concerned about fonts, graphics or logos. And be sure to include a signature file with your web site and phone number so your prospects can contact you for more help. Click on the BCC: button. Change the drop-down list under the “Show Names” box and select the folder marked prospects. Highlight all of the entries in the list and add them to the BCC: line. This will quickly include every prospect – new and old – on your weekly message.

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Now press send.

Here’s what’s going to happen: Nothing. That’s right, mostly nothing. It’s the same thing that happens with all of your marketing – mostly nothing. Maybe a couple of replies – but that’s no worse than 1% response rates from expensive postcard mailings. But that’s not the point, really, is it? Marketing isn’t about response rates – it’s about consistently reaching out to prospects. If you do it every week, over time, even those long-term leads will come to recognize your name and remember your willingness to help them. When they are ready, they will remember agent who has been consistently providing them with helpful ideas all those months – and that’s you!

At the same time, the cost to reach out to your prospects drops to near-zero, and stays there no matter how large you scale the group. Whether you email to 40 leads or 400, the cost is so low to do it by email – just 15 minutes of your time to compose a short weekly note – that it’s absurd to consider any other form of direct-campaigning for future business. Since you don’t have to write long articles or worry about complex desktop publishing, your email campaign should help you reduce costs by eliminating wasteful design time, costly printing and outrageous postage bills – none of which are as scalable as email (check with your accountant).

Which brings us back to our original problem: following up on leads. For every email you receive, the key to success depends upon maximizing the potential to convert that consumer into a deal. Keep in mind that leads aren’t free – even email ones! Every single prospect comes with an “invisible” cost attached to them – the cost of your website, the cost of your banner ads, etc. Without a plan to follow up every lead until they absolutely, unconditionally surrender (or tell you to stop) you aren’t helping your business by going online. In fact, you may be hurting your business: moving your primary marketing efforts online without a secondary campaign to follow up each lead, new prospects represent unrecovered expenses. It is only an integrated, two stage plan – one that attracts leads online and one that follows them up later by email – that can maximize the potential to convert and recover your investment in online advertising.

Finally, remember this: there are lots of products out there to simplify the process of follow up email. But for starters, keep it simple. Don’t overdo it by constructing more databases and complicated email designs. Just drag the emails in a folder, drop them into a BCC line, jot a few lines and move on. Even if you’re not writing award-winning copy, the effect of putting your name into their inbox every week helps you take advantage of email as the cost-effective solution to simplifying your prospecting.

Take a look around and you’ll likely notice something about today’s “brand names” in business. Too many of them are crumbling. Now, I don’t mean “imploding” like Bear Stearns; that’s too amazing a disaster to consider anything more than pure mushroom-cloud brand bomb. Rather, I mean the slow rot of some of America’s most “trusted” names in commerce. Sears. Hertz. Ford. American Airlines. Even “recent” brand wonders like Dell computer are disintegrating like rusty chrome bumpers on a ‘74 Oldsmobile Delta 88 (a brand that no longer exists itself).

Why are these brands – once market leaders and marvelously profitable companies – crumbling brands sinking to the sea floor like a sorry-about-that-iceberg-thing luxury liner? Simple.

Neglect.

And a very special kind of neglect, too. Not the take-a-stupendous-risk and fall-flat-on-your-face kind of neglect. Not even the “hey, we’re a car company but let’s try to hate our own products because oil is bad” kind of stupidity, either. I mean a much more simple, invidious neglect. The kind that comes from hiring people who don’t know what your company stands for, don’t care who the customer is, can’t say what their job really is and never receive meaningful training to change any of it.

Oh. That kind of neglect.

Take a case in point from last night: Two weeks ago MGM just opened a brand-spanking-new hotel at Foxwoods Casino in Connecticut. Now, anyone who knows anything about casinos knows that Foxwoods is the largest casino in the world and the most profitable of all Indian-owned casinos nationwide. The MGM in Las Vegas is synonymous with style, service and fun. Put the two together and you’d expect to get a powerhouse killer application of casino marketing brand and operational know-how, right?

Wrong. Instead you get a disaster.

The first “neglect” comes in the form of the customer experience. Nobody at Foxwoods/MGM has apparently walked in the footsteps of their customers. If they had, they would have noticed that there are no signs anywhere that tell guests how to actually get to the hotel. Only a stop at the original hotel to ask the valet directed us in the right direction.

In fairness it wasn’t a complete first-experience disaster. The valet, guest greeter and front desk staff were wonderful. And without a doubt the facility is modern, spacious, gleaming and high-tech. Rooms are very high end and even the elevators were lightning fast. But that’s not what makes a brand, as we know. Fancy materials and cool tech tools can’t make up for what happens (or not) when your customers interact with your staff.

For example: no product or service can make up for the kind of neglect from a hostess at the restaurant pointedly avoids making eye contact with you – for a full five minutes. Not the kind of “I’m talking to five people at once, sir, sorry I couldn’t greet you” kind of ignored. Rather, the all-to-familiar “don’t look at me, don’t make eye contact” ignored that comes from hiring staff who have no experience creating a customer experience; and no training to help them do it either. Neglect.

Or the bartender who similarly avoided us for a few minutes, only to take our orders without a smile. A minimalist amount of conversation later, she actively badmouthed “getting married” (we were there for a bachelor party) and not the jovial “there’s still time” kind of banter. Real. Viceral. Uncomfortable. So to save her more pain, which we were clearly causing, we moved on to the casino.

If you’ve ever played Blackjack, you know there are three components to the game: losing money, someone smoking a stinky cigar next to you, and free drinks. Well, we certainly got two out of the three. But for an hour, even after asking twice, the “ignore the customer” policy continued. No waitresses were to be found; and no apologies from the pit boss, either. Just play the game and shut up. Thirsty, we headed off to dinner.

Short of losing the room reservation, nothing is worse than losing the dinner reservation. Actually, there is something worse: not keeping it. Our 8 o’clock reservation meant we were supposed to arrive at 8, but they’d seat us at 8:30. Apparently nobody remembered that Seinfeld was the opening comedian this week. Reservations mean we arrive and don’t have to wait because there’s a table waiting – reserved – for us…. Nope.

Now, not all hope for the brand is lost; because someone clearly trained the waitress. But it wasn’t the restaurant management – probably the customer, whose tips are the best way to induce great service. It’s more likely her great skills were the result of natural talent, considering she was the “exception” and not the rule amongst the staff we had met so far.

Over and over we experienced the most dangerous but simple way to destroy a big Brand name: Neglect. The engineers clearly neglected to think of consumers driving around the parking lot. The management neglected to train their wait-staff to create a customer-friendly eating and drinking experience. Even positioning some “naturally talented” staff couldn’t make up for the damage done along the way to the consumer.

To make a long story short: You can take the best of two powerhouse brands – Foxwoods and MGM – you put them into the finest, most state-of-the art building, cook the best steaks in town and build the sexiest nightclub and spread the finest sheets and pillows. Yet it will all come to nothing if your people can’t deliver comparable levels of service. The elevators were light speed; the waitresses were not. The food was delicious; the breakfast coffee ran cold. The lines were short; but that’s because too many customers simply gave up being ignored and went to the fast-food area.

Does this sound like any real estate companies you’ve experienced lately? Maybe even your own?

Your brand isn’t about your building or your advertising. It isn’t about your shiny technology. Or your expensive goods. It’s about your people. Always. Your staff, managers, vendor-partners will make or break your brand. It doesn’t matter if your casino is always packed – eventually, you’ll annoy enough of them that they won’t be coming back. Keep pretending your customer sitting in front of you is invisible, and he’ll  actually become hard to find when he stop showing up.

Your brand is your people. If you neglect the consumer when you hire unqualified agents, you’re undermining your own brand. if you neglect the consumer when you fail to rigorously train and prepare your agents to deliver great service, your brand suffers. If your secretary stares at her computer screen rather than greeting a walk-in customer; if your agents let consumers walk around open houses all by themselves; if your listing agents ignore their seller customers because they can’t check their email from a smart phone while on the road – you’re brand is dead.

Forget about the competition. Nobody is putting Dell, Ford, Sears, MGM or many of the real estate companies in the marketplace out of business today. It’s not the competitor that’s destroying today’s brokerages. Too many once market-leading brokerage firms are crumbling simply from within.

NAR turned 100 years old this year.

Think where we have come in 100 years. Think how fast our business has changed since the mid 1990s with the introduction of the internet into the business sector. With this anniversary in our midst it is time to think about new standards of performance for our business. Why? Today’s consumer is unlike any consumer we have ever known. This is because of the rapid acceleration of the internet and the rate at which people like to communicate. They expect and deserve new levels of professionalism from us . These new standards start with our communication with the consumer. Where to start?

Active communication – stop talking and start communicating

Active Communication means communicating to the consumer the way they want us to. If the consumer prefers email, don’t call them. If they can’t get to their email but want you to text message them, do that. Not only can these forms of communication save us from voicemail phone tag but they allow us to get the information to the consumer when we are thinking of it and when the consumer wants it.

It has never been easier to keep in touch. Email enabled cell phones allow us to receive our email throughout the day, and make it easier to text message via the keyboard. Remember, everyone has a cell phone. Everyone can receive text messages. Maybe some of the calls you are making right now could be replaced with non intrusive text messaging to get the message out.

NAR says only 28% of REALTORS® use an email enabled phone which is above the consumers adoption level of 11%. Kudos to us. This is a tool the whole industry needs to embrace. We used to think that being connected 24/7 would end our lives as we know them. The exciting thing is that we can train ourselves to take one minute email breaks every hour and check to see if there is something we need to respond to. If not we can wait until we are sitting in front of our computer. If you need to respond a simple email signature stating your are responding from your Blackberry or TREO lets the consumer know you are on top of things. Imagine not having to do mass amounts of catch up at the end of day. Imagine the consumer getting a “just in time message” when they need it.

The consumer is happy and so are we.

What features are vital on these phones? It really doesn’t matter what brand you buy, but here is a short check list of features to make sure you include:

• Cellular voice calling
• Email Functions
• Real time calendar and tasks lists
• Text Messaging and Web browsing

Research In Motion (RIM) claims its BlackBerry, wireless email device saves users almost one hour per day of otherwise wasted time, and cuts the time spent on a mobile phone by 15%.

What does that mean to us? If you save one hour a day because you can read and respond to emails on the road, what is that worth to you? What are you worth an hour – $75, $100, $500? Whatever the dollar amount, it helps pay for the device within the first few days and the rest of the year you can make money with it. Emailing and text messaging means that you are using less phone minutes so you can cut down your cell phone bill as well. In the end the cost for this device is FREE!

New Standards in our Industry need to be applied to our marketing, so take a moment and find out what the consumer wants . . . and then give it to them.

Every year NAR publishes its Profile of Today’s Homebuyer and Seller and one section focuses on the “Most Valuable Features of Web Sites” – items consumers demand when they are on your website. Here is the breakdown:

Photos: 83%

Property Details: 81%

Virtual Tours: 60%

Maps: 43%

Area info: 37%

Agent info: 31%

NAR says that 96% of consumers start with a property search. If you don’t have a search button predominantly displayed on your website, allowing the consumer to drive the experience they will search somewhere else. A consumer will stay on your website for just a few seconds if they can’t find what they are looking for.

When they find listings, do you have the featured items above? If not the consumer will eliminate properties from their home search. If they do a search and half of the listings only have one photo, those listings are eliminated immediately.

Do you have more than ten photos per listing? Even shoe websites like Zappos has ten photos of shoes. Shouldn’t your listing client at least enjoy the same amount of photos that a pair of shoes does?

Staging is key with today’s photos. Martha Webb author of “Dress your House for Success” says “With all the emphasis on staging, it’s important to remember that preparing a home for market is a process that starts with the basics of cleaning and uncluttering. Clean, clutter-and-odor-free account for 35% of a buyer’s first impression. This can be accomplished in a few hours and at almost no cost. Next, a coat of paint will create a clean, fresh feeling for minimal cost. These simple steps show buyers your house has been well cared for, and that translates into value!”

Just by uncluttering a listing will make your photos more appealing. You listings will have more staying power on the internet. Take time to revisit your listings and the photos. If your photos need help, consider hiring a professional. If you can, investigate a staging course like Certified Home Marketing Specialist and learn the dialog to help the consumer partner with you to make their home look the best it can in photos.

34% of homes sold last year were found directly on the internet. That means after filtering through home after home the internet consumer found the actual house they wanted to buy. They called or emailed you and you showed it to them, and SOLD it to them. The first showing for many buyers is happening on line.

New standards of performance are simple. Give the consumer what they want, photos, lots of them. Make sure they can reach you by email, phone or text messaging – in the time and way they require.

Technology can help streamline your communication process and your marketing efforts. Welcome to the next 100 years.

- Amy

Here’s an quick thought that could have a profound effect on how REALTORS can improve their business:

Use what you already have.

It’s amazing how many of us already have enough technology to list and sell homes for three careers. Yet for some reason, agents and brokers are always on the hunt for the “next silver bullet” to boost their sales. Now, I completely understand that we’re under a constant barrage of “use this, it’s new” marketing by tech companies and gadget freaks. But for a group that’s notoriously resistant to all of this stuff, it’s remarkable how agents are also the first ones to consider throwing their money away on the quick fixes.

Take, for example, online leads. Why do agents pay for them? It’s the modern-day snake oil sale, and it never fails, because the formula is so simple: “We had an agent who got a lead and it lead to a million dollar sale! That could be you!” Sure. If I remember, Ginsu used to “cut through a tin can and still cut a tomato.” Of course, nobody wanted to eat a tin-tasting tomato, now, did they?

Paying for leads from third parties is simply ridiculous. The facts continuously bear it out. More than 75% of listing appointments come from referrals and repeat buyers – no need to pay for listing leads when all you have to do is keep in contact with past customers. Use the tools you have – a phone, email, a newsletter – and you’re going to hit three out of four listing opportunities you’re likely to get anyway. The other 25% is easy pickings, too. Use the internet and MLS – again, you already have them – to locate expiring listings and For Sale By Owner advertisements. We know that both of those sources have an 80%-and-upwards likelihood of working with an agent. And let’s not forget all of the leads the broker is already generating for most agents – and hands them out to them usually at very little cost – which the agent simply gives up on after a couple of days because, well, “the customer didn’t email me back…” Pay for leads? Nonsense.

What about marketing your listings? Again, the lengths to which we go to market listings is bizarre, considering the tools we already have are vastly under-used. We’ll pay someone to do a virtual tour, maybe $100 or more, but the website only has five photos on it. Why not use that camera – which you already have – to upload 40 photos. Maybe you don’t even need a virtual tour – if you had 40 photos, would anyone really need the “spin me around and make me dizzy” video clip? Probably not.

My favorite “pay for something new, because I didn’t know I already had it” are those agents (especially those who are new to the business – who teaches these guys?), who think they need to spend $5,000 on a new website, domain and Google advertising campaign. First, agents web pages are largely self-defeating. Except for those agents who are in the 100% clubs, most agents working for standard-split brokerages are swimming against the tide with their personal websites. Other than the capital outlays, do they think they have enough money to out-compete their own brokerage for the web traffic? Never mind the competition – who do you think is buying the same keywords and ad placements as the agent? The broker! Duh! And when the consumer does a search online and sees a list of results, do you think they’re going to click on the “John Agent’s Website” or “Well-Known Company Website” ? Of course, every one of these agents has a broker-given profile page on their company site. That’s PLENTY – remember, only the TINIEST percentage of consumers said they search the web for AGENTS – FOUR PERCENT. That’s right: 4%. Sorry to bruise your ego; but it’s not ABOUT YOU, my dear fellows!

So, let’s see: We can find leads using the internet connection we already have. We can promote listings by clicking a few more times on the camera we already own. And we can promote our selves to the traffic our brokers are already purchasing and driving to our listings anyway. Can anyone think of a good reason for agents to be paying for leads, outsourcing video tours and building their own websites?

I can’t.

Here’s a daily dose of Peter Drucker for you to consider:

In some knowledge work – and especially in some work requiring a high degree of knowledge – we already measure quality. Surgeons, for instance, are routinely measured, by their success rates in difficult and dangerous procedures, for example, by the survival rates of their open-heart surgical patients. But by and large we have, so far, mainly judgments rather than measures regarding the quality of a great deal of knowledge. The main trouble is, however, not the difficulty of measuring quality. It is the difficulty in defining what the task is and what it should be.

- Peter Drucker, Management Challenges for the 21st Century

Now, let’s apply Drucker’s sagacity to the real estate industry as it is today – and how it might evolve in the future. How should we be measuring the knowledge work of today’s REALTOR?

For starters, we can quickly list how not to be measuring it. Here are a few bad measurements that need to be discontinued:

• Number of listings. It is wholly irrelevant to measure the number of “available listings” by a particular agent or firm, unless we measure success by the number of listings taken. Clearly, we do not – because the goal of listing a property is to sell it. So “top listing agents” are really irrelevant measurements of competitive quality between practitioners. And homeowners should dismiss these comparisons as meaningless. If any one agent or firm wished to be the “top listing agent” they could simply a) agree to any listing price the seller wanted, b) agree to market the home any way the seller wanted and b) drop their listing price to loss-producing levels. None of these activities would be, of course, methods for longevity in the marketplace; but they would certainly result in an agent or firm being the “top” of the market as measured by number of listings.

• Number of offices or agents. The size of a company is not necessarily an accurate measurement of its quality of work or application of knowledge. Some companies can generate tremendous positive results – for their clients and their profits – without any office location at all, or with the barest minimum of staff and employees. Yet being the “biggest” real estate company on the block (or state or country) is still some kind of success factor that is heavily used in marketing. Of course, marketing rarely reflects anything close to a true measurement of quality – since it can selectively target one statistic and “equate” it in the mind of consumers with success, usually without any reference to desired outcomes. Consumers can equate “bigness” with “better-ness” because in some industry, bigger is better. A bigger computer company delivers lower costs than a smaller one. But a bigger phone company usually delivers miserable service: the demonstrated knowledge quality of its customer service representatives hardly inspires anyone to call them “successful.”

• Technology statistics are also meaningless measurements of knowledge, in too many cases. For example, most agents and firms are constantly on the quest for more “web traffic” known as hits. Even the number of “buyer leads generated” by a website cannot be said to be a significant measurement of the knowledge workers in the firm. And the ephemeral “get to the top of the Google search results” is certainly nothing harder than spending more money than the competition; rarely do websites reach the top of results because their content demonstrates substantially better knowledge quality (content, information, design, consumer friendliness, interactivity) than other brokerage firms’ sites. More mundane measurements are more clearly worthless: for example, some 90% of agents who have recently attended our seminars “own” laptops, but a mere 10% of them usually take them to listing appointments or open houses. Essentially, they don’t bring their knowledge management tools to work.

So how should we measure the quality of REALTOR performance? To measure their work, Drucker suggests we must define the desired outcomes. This would be the best way to measure the application, quality and degree of knowledge for both individual agents, firms and real estate corporations. Consider the question, then, of what the desired outcomes of successful real estate knowledge work might be:

• Everything would be measured in sales. We would stop rewarding mere “listing” activity by agents who brought home listing agreements that included non-marketable prices (ie., overpriced listings) or unwilling sellers. Clearly, the overpriced listing is a failure to apply greater knowledge than the customer to pricing a commodity. We would also discontinue all rankings and awards based upon “top listing” agent or firms. What is the customer looking for? Certainly not just placing their homes on the market – but selling them. We would therefore only focus on top selling activity. The agent or firm who sold the most number of units would be the first start. But it would not be the end of the measurement. Just as the doctor who had the most number of patients survive the surgery only represents the “first” measurement of quality, we must look deeper. How many patients survived one week, one month, one year, ten years down the line? In real estate, we need to measure how many sales resulted in positive profits: low days on market, high margins, low inputs (marketing, effort, etc) and higher quality experiences for all parties to the transaction? Customers want sales – both buyers and sellers – but they also want cost efficiencies, time savings and convenience. Those are the true measurements of knowledge properly applied.
• The size of the firm in agents, employees or locations would be only directly proportional to the necessity of such size to scale the application of knowledge in the marketplace. Some firms, who might specialize in location-intensive activities such as personal meetings, open houses, showings, etc., might need more people and locations to properly apply their knowledge formulas. Others might need fewer. There is no “right answer” to this measurement, other than determining the  absolute profit levels for each location and worker.  Certainly, the classic formulation of “more bodies equals more sales” would be discarded for an equation of “more profitable transactions, delivered in any customer-desirable manner.” The entirely online transaction, the virtual office, the subcontracted paper-pusher, showings or open-house, marketing staff, etc., might all be better formulations for successfully applying knowledge to any (or many) marketplaces. More offices and workers isn’t a measurement of anything other than overhead and payroll. Even the “excuse” that agents aren’t payroll-expensive because they are subcontractors would be exposed as the falsehood it is: More agents clearly mean more office size, marketing activities, letterhead, business cards, email accounts, and so on. More would cease to mean “better.”

• The competitive value of technology would be repositioned. Rather than measuring quality by the “mere presence” of technology, it would be re-evaluated in terms of its value in the “transaction cycle” which leads to a sale. Essentially, technology would cease to be valued “in itself” and start to be benchmarked as an element of the supply chain. So laptop ownership becomes meaningless; use of the laptop to sell more homes, streamline paperwork or improve customer service would be measured and compared. Most REALTORS, of course, would be immediately marked as failures: Most studies still show the average REALTOR taking hours, if not days, to respond to online consumer inquiries. But it would be an important start to measure technology’s intended results, not its activities. Web hits are meaningless unless they lead to consumer interactions – leads – which themselves are also meaningless unless they can be translated into sales. The application of knowledge is at both ends of the supply chain: knowledge of web marketing to generate traffic and inquiries, and knowledge of sales to convert it into a sale. The “technology in between” is itself of little value; it’s a commodity that can be purchased, replicated and upgraded by any competitor. Only the knowledge of positioning, using and implementing it – at either end – is a measurement of effective knowledge work. Anyone can pick up the scalpel or the laser but only a knowledge expert knows how to use it to cut tissue or steel.

The next generation of real estate is going to confront these management challenges soon – if it isn’t already – since the “old school” criteria to be a “successful” brokerage firm or agent are quickly losing luster. Both consumers and future practitioners are wondering why these measurements ever made sense – and they may have in a more medieval practice where real estate was mostly an apprenticeship career where the number of “outputs” were the only criteria for success. In the pre-industrial days, the number of sweaters produced by a cottage worker was all that mattered: if you could sew more, you could be more “competitive.” Once textile mills were built, new measurements mattered: the number of choices of color, fabric, size and comfort soon trumped the mere quantity of production.

The same transformation, inevitably, is coming to real estate.

Memorial day traditionally honors those fallen soldiers of war in our country. Since the end of the Civil War, the holiday has been an opportunity for ordinary Americans to set aside some time – officially, without work – to remember those who gave their lives to defend our way of life. And while most wars are fought in defense of “liberty” and “democracy” and “freedom” they are all ultimately struggles for the one item on the planet that makes all of those concepts possible:

Property.

Jefferson’s famous statement in the Declaration of Independence – “life, liberty and the pursuit of happiness,” was essentially a modernization (in its day) of John Locke’s tripartite formulation of good government. The job of government was to defend, “life, liberty, and estate (or property).” The basis of a just society was one where “no one ought to harm another in his life, health, liberty, or possessions.” (See Locke, Second Treatise on Government).

Property has always been the basis of freedom. Kings with land were free; serfs who worked as tenant farmers were not free. Pharoahs commanded fertile fields; slaves were whipped to build pyramids. It is the fundamental basis of all civil rights, for one’s primary right – the right to his life – is a fundamental right to the “property of his own self.” In essence, we “own” ourselves and nobody else does (a king, dictator, legislature, president). All subsequent possessions – real estate, goods, gold, etc – are all forms of property. In essence, freedom is directly correlated to the right to own property. And no greater form or quantity of property exists than real estate (for there is far more land than even gold).

Now, more than two centuries later, citizens who enjoy the greatest freedoms – of self, expression, religion – are those who also possess the greatest amounts of private property. Countries in which the greatest freedoms exist for individuals – America, the United Kingdom, the Bahamas, Switzerland, Canada – also rank far higher in property ownership (and lower in overall tax burden) than societies who rank at the lowest levels of freedom: North Korea, Myanmar, Syria and Cuba. Any time you wish to quickly gauge the state of affairs in a country, you can look directly at the state of its real estate marketplace to get an instant analysis.

That’s why REALTORS in America have, perhaps, the second-single most important job in the land, after soldiers, of course. REALTORS are the “homeland” soldiers defending freedom. Every private transaction of  property adds another brick in the foundation of freedom in society. Every renter who is helped to own their own home increases his “freedom” from the interference of other men (even kindly landlords). Every transfer of wealth – inheritance, capital gains, rental income – derived from property strengthens our liberty.

Remember, every one of the Founding Fathers was a land owner. And (originally) they were so keen on property as the basis of society that they even considered restricting suffrage to only “freeholders.” So property, best understood, is the bedrock of America.

It is this awesome responsibility that REALTORS must remember every time they do “another transaction” with “some buyers and sellers.” It’s not just another “deal” or “sale” they are playing with – not like another “computer” or “car” or disposable good. Real property transactions are real liberty transactions. And REALTORS have inherited the Founding Fathers’ responsibility to safeguard both. The two are inextricably linked and the repercussions of bad stewardship are far more than a “slumping” market.

Locally and nationally, the Stewards of Liberty should remember to oppose every infringement on property rights – from any local tax to local restrictions on ownership. It’s much more than just “fair housing” that REALTORS need to watch for – it’s infringement on housing by bureaucrats and busybodies – legislators and lawyers – who would whittle away property rights, and with it all other rights. It is why moral outrage at the Kelo case should continue every day and why right-thinking REALTORS should oppose government bailouts of speculators. Whether the danger comes from government or speculators, REALTORS should always be on guard for harm.

Not just to their market. Or their livelihood. Or their clients. But to Liberty.

Who knew being a REALTOR meant so much!

Happy Memorial Day.

Well, thank goodness for someone who understands the markets – other than the lopsided “woe-is-us” viewpoint of the National Association of REALTORS (NAR). In fact, when it comes down to it, maybe we should ask more Wall Street analysts and hedge fund managers to really monitor the markets for us. Here’s the good news, from the Wall Street Journal:

The Housing Crisis Is Over
By CYRIL MOULLE-BERTEAUX
May 6, 2008; Page A23

The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now….

Apparently, the real estate market is better understood by measuring housing inventory than simply hand-wringing over dropping prices. Since bubble-pricing had nowhere to go but down, then the true measure of the market cycle is better monitored by measuring absorption rates rather than price swings. This makes sense because commodity prices rise and fall with the volume of sold; not the other way around.

Of course, in REALTOR mentality, the reverse is true: if prices rise, the number of homes is expected to rise; when prices crash, REALTORS can’t sell homes – not because buyers don’t like a bargain, but because too many REALTORS don’t know how to put homes on the market at the right price. And the right price is always determined by the buyer, not the seller. As long as REALTORS take their pricing orders from the sellers, they won’t recover their sales volumes. Once they understand that their job is to create a transaction, not represent the pricing strategy of an unskilled seller, they will be back in the saddle. Commodity (stock) brokers have always understood this: If a stock holder calls and asks to sell their shares at 20% above the current selling price, the broker attempts to explain to them how a market works. If the seller insists on an inflated price, the broker hangs up the phone. Only REALTORS agree to take on the expense and waste their time trying to sell overpriced commodities – because they agree to run their business according to the seller’s insanity, not the buyer’s authority.

So what are buyers telling us? Here are the relevant selection from the article (although you should read it all because it is quite excellent:

The boom made housing unaffordable for many American families, especially first-time home buyers. …Prices got so high that people who intended to actually live in the houses they purchased (as opposed to speculators) stopped buying. This caused the bubble to burst.

Since then, house prices have fallen 10%-15%, while incomes have kept growing (albeit more slowly recently) and mortgage rates have come down 70 basis points from their highs. …

In the past five major housing market corrections (and there were some big ones, such as in the early 1980s when home sales also fell by 50%-60% and prices fell 12%-15% in real terms), every time home sales bottomed, the pace of house-price declines halved within one or two months. [emphasis added]

…New home inventories peaked at 598,000 homes in July 2006, and stand at 482,000 homes as of the end of March. This inventory is equivalent to 11 months of supply, a 25-year high – but it is similar to 1974, 1982 and 1991 levels, which saw a subsequent slowing in home-price declines within the next six months. …

Inventories will drop even faster to 400,000 – or seven months of supply – by the end of 2008. This shift in inventories will have a significant impact on prices, although house prices won’t stop falling entirely until inventories reach five months of supply sometime in 2009. A five-month supply has historically signaled tightness in the housing market. [emphasis added]

So, we’re already way on our pat to another “tight” market. Will that mean prices will soar again? Not likely – the next round of tight markets will more likely be “throttled” by tighter credit and lending practices (if we can keep FHA from creating the next bubble, instead of the Fed). Non-government backed loans will keep the lid on price inflation, even while the Fed continues to devalue the dollar and cause other commodities (food, oil, electricity) to soar. In fact, because the Fed is intent on creating and maintaining rising inflation rates, housing will be the least likely item to rise in price, since a substantial amount of buyers’ disposable income will be tied up in monthly expenses – limiting down payments. Yet another reason to keep a lower ceiling on loan limits, so that buyers can’t get themselves into “more home than they can afford” once again.

How should REALTORS take advantage of this clear evidence of the slow but steady upswing? Here are a few ideas:

1. Stop lobbying the government to reflood the credit markets with cheap money. Remember, REALTORS can work for buyers just as easily as they can for sellers. And every deal needs both: so pricing out buyers by re-heating the price markets will only stall the recovery. Sellers can pine for the good-ol’ days all they want: Buyers understand they can always wait it out, or simply purchase from the large quantities of unoccupied foreclosure and new construction markets. REALTORS need to keep their wits about them and lobby for real market forces, not free lunches.
2. Start creating technology and market efficiencies that make it possible to seller “lower priced” homes  – which yield lower commission incomes – at profitable margins. Why do REALTORS need housing prices to rise? Because so much of their current business practices are bloated, cost-heavy and inefficient. Large office spaces mean large rents, even when agents own laptops and could work from the road. Newspaper advertising continues to suck up cash flow weekly, even though every scrap of evidence shows it is useless for marketing particular properties. Wasteful pay-per-click marketing online creates the illusion of generating leads, when all it really takes is a phone call or email to a past client to get a strong referral from old clients to potential new clients.
3. Train agents to do their job. Or start hiring sellers, if you prefer their pricing strategy to your agents’ skills. Or start firing both (untrained agents + unrealistic sellers = financial disaster). Real estate brokers need to decide if they’re running an independent contractor babysitting agency or a business. They have to decide whose bottom line matters – their own (and their agents’) or their sellers (which, if they are unsupported by market facts, aren’t really bottom lines but fantasies). If brokers and agents can take away one less from the last three years, it’s this: The market does not care if you “want to help people” or run your business on wishful thinking. It hammered Bear Stearns, and it was bigger than anyone in the real estate business. Wiping aside silly-minded brokers and agents will be nothing to the marketplace, and perhaps welcome to many buyers who look at overpriced inventory and ask: How can they not understand it?

So, great news! The market is on it’s way back to a normal, healthy, consumer-driven environment. It’s up to REALTORS to figure out how to play in the game. Hyped values and free money isn’t coming back for a long time – so now is the time to figure out how to use sales, marketing, technology and consumer research to build the next generation of real estate brokerage.

Successful sales professionals know their careers depend upon good networking. Connecting to consumers and other industry players remains the purpose of REALTOR Associations, chambers of commerce, condo associations and country clubs. Networking is the source of new leads and referrals. Yet in a faster, busier world, where there’s less time to go to the club or make it to a meeting, social networking opportunities have evolved to take place more conveniently, with greater access for everyone. Social networking has moved online, all the time, on the web.

Social networking online isn’t new. For nearly two decades, internet users have joined “discussion lists” and “chat groups” to make friends, exchange ideas and generate business. Traditionally, these forms of networking were based around a daily email with entries from participants “talking” about different “subjects.” Over time, the email digest moved to discussion web sites where threaded entries were posted on message boards. Users could browse the latest entries then post their thoughts to the author or publicly so the entire group could read their comments. Conversations were generated much like a kind of letter correspondence group, although faster and with greater numbers of participants.

Today’s social networking opportunities are more sophisticated but their purpose remains the same. Get a group of people with shared interests interacting – but this time, use tools that let everybody access the discussion whenever and whenever it’s convenient. No more scheduled meetings or missed ideas. Instead, real-time tools such as blogs, instant messaging and video conferencing have made it possible to network anytime, with larger and larger groups of people. Cool sites such as YouTube, MySpace, and Blogger, have transformed the very concept of websites – from online “merchandise showcases” to interactivity opportunities between the host and its visitors. Just about anybody today can create and facilitate online networking, with virtually no programming knowledge or even cost!

In the real estate industry, the core social networking tool today is the blog. Essentially, a blog is a daily newspaper (or diary) of postings on a website by an author. Unlike a website where “news” is posted from time to time, blogs are updated nearly every day, or multiple times within the day. They also encourage readers to add their comments to the postings. Modern consumers are used to taking opportunities to interact with authors on topics that concern them. Most news sites have featured a “talk back” tool alongside their news stories for years. It’s only natural for real estate websites to evolve this level of interactivity between consumers and real estate professionals.

Social networking through a blog can be as easy as creating a public page on Blogger, then adding daily short postings on current real estate events, local market conditions or particular property opportunities. As the agent or broker grows and promotes the site daily, the public will return to the blog frequently (the more postings, the more returning visitors), especially if it offers them ways to directly interact with the REALTOR other than picking up the phone or emailing. The result is the creation of a real-time mechanism for engaging the public rather than simply presenting to them.

In addition to interacting with the public, social networking tools can also be used between agents and brokers to generate referrals, learn new ideas and build their sphere of influence. For example, agents can create a free blog on websites such as RealTown (www.realtown.com), which hosts more than 60,000 active participants from around the globe. These agents interact on each others’ blogs, sharing news and ideas from their marketplaces and experience. They also engage in daily email-digests which facilitate discussions on hot topics such as technology, sales, marketing and agency. By creating a variety of online meeting mechanisms, RealTown has made it possible for agents learn from the entire real estate community, not just their local participants. Leveraging such networking tools, an agent can make friends and possible generate business with virtually no cost other than their time and participation.

Blogs and email digests have become popular social networking tools because they let anybody participate by simply “word processing” their thoughts into a web page. They also include tools for uploading a photo, video or audio recording (podcast) with the text, so interactivity goes beyond the written word. Gaining importance in this area, though, are faster forms of interactive tools such as instant messaging and video conferencing. While most real estate professionals continue to dismiss instant messaging and online chat as something “their kids do,” the irony is, that’s the point! It’s clear that the pathway into the first time home buyer marketplace online is through instant messaging.

Generations X and Y use instant messaging almost daily; most certainly to communicate with friends and increasingly with customers at work. In their experience, the social networking never stops. Phone calls and voice mail have been replaced by cellular text messages directly to one’s cell phone: no need to “check” when messages are automatically (and instantly) displayed. In essence, these generations have created an always present and available culture of networking. They form, build and maintain relationships – personal and professional – in real time, all the time. And while most agents are still “challenged” with getting their email in real time (with a Blackberry) these future real estate consumers are communicating with each other in an almost endless live cycle.

The key to social networking is that it’s interactive. This means that it requires daily (or real-time) participation between people in order to be successful. For many agents, this is a whole new challenge to leveraging the internet. Gone are the days where being successful online meant simply uploading new listings and sending out an e-newsletter once a month. The competition to engage – and keep – consumer’s attention has moved beyond the correspondence model and evolved into the networking model. Real estate online is no longer the “catalog” model – where consumer browse web sites for listings or agents that might catch their interest. Smart consumers want much more than “new and updated” inventory. They want access to people. In fact, social networking means the entire reversal of the old model of real estate website marketing. Real estate agents must start reaching out to customers through social networking rather than waiting for consumers to reach out to them! It’s already happening – from MySpace to Toyota’s Scion – websites. There’s no better time for real estate agents to go start networking online.

Show me an agent without an opinion about the market, buyers, sellers or mortgage rates, and I’ll show you a dead agent. But try to channel that agent’s opinions into a useful marketing tool and I’ll suggest you create a blog.

Web logs, or blogs for short, have made quite a lot of noise online in the past few years. Even before the last presidential election, blogs were slowly transforming the old Internet bulletin boards into a new form of daily journal. Blogs are well known in news, political and financial webspaces, where pundits, politicians and fund managers have been posting their thoughts – or ranting, more likely – about anything their fingers cared to type. More recently, however, blogs have started to appear on more traditional, published-based web pages, like real estate brokerage and listing aggregator sites.

The fascination with blogs is both energizing and dangerous. Real estate professionals consider blogs a place they can “speak their minds” about the market, consumer and everything in between. Consumers relish the power of blogs to give them a voice online, too, as many a blogspot has appeared to let consumers praise or vent about their real estate experiences. And this two-way street doesn’t just apply to real estate – just ask Apple computer who uses blogs to “leak” news about new products but likewise felt the wrath of their customers when a batch of defective iPods started malfunctioning just a few days after their warranties ran out. Still, just as Apple learned to listen to the consumer in blogs, real estate agents can use blogs as powerful marketing devices and feedback tools to help them refine their customer service.

Blog technology is relatively easy to use and usually free. There are two general approaches to blogging: you can get an account with a service that lists your blog – along with thousands of others – on their web site, or you can set up a blog account and feed the data into your personal website. The first approach is a snap: open an account and start publishing right away. In fact, blogging services are available for free from sites like Blogger.com where you can create a new blog within five minutes. Your account will feature a web page that contains your postings in chronological order. Since a blog is essentially like a “running newspaper column” you can also set your account to “archive” postings after a few days, but still let visitors browse them backward if they wish.

To create a blog entry, log into your account and use the built-in editor to essentially type your thoughts, just like a word processor. You can use text enhancements, include hyperlinks and even add photos. When you are ready, one click is all it takes to add the new posting to the top of your list. It’s really that simple and many bloggers post multiple thoughts throughout the day. You can even let readers reply to your postings by email or add their responses directly to your page (which you can permit on a per-comment basis).

Some of the more clever features of Blogger.com include the ability to send in thoughts and photos to your blog using your cell phone. Essentially, you write a posting using your text messaging or email feature and send it to a special email address for your account. For real estate agents, this could be very creative – such as posting some new listing photos or a price reduction to their blog in real time, simply using their cell phone! And if that’s not cool enough, just use your cell phone to post an AudioBlogger entry to your site – which records your voice and adds your comments as a downloadable MP3 file – perfect for your readers who download podcasts daily and listen to you on the run. And some blog sites even let you feed your blog data to your website in RSS format – which is special feed your web programmer can use to integrate the blog into the look-and-feel of your existing website.

Creating and managing blogs is really easy; once you get started, in fact, it’s hard to stop. It can become downright addicting, once you have a “voice” on the web that you can use within seconds. On the other hand, it’s also important to remain calm – and cautious – when using your blog. Nothing can do more harm than a “hastily” posted blog entry during the heat of a stressful moment. So here are a few tips for real estate professionals for managing their blogs.

1. Start slowly by posting maybe two entries a week. Use this pace to get familiar with the medium and collect your thoughts. For many business professionals, this is a time to create a “style” for you blog postings. It’s also important to assess your writing skills, since blogs should remain professionally spelled and punctuated.

2. Create a theme for your blog: Maybe it’s a “market watch” approach or “success stories” you want to highlight; alternative ideas could be “new listings” or “buyer advice” columns. If you use a theme, then it’s easy to keep your postings targeted to your message – and keep off-topic rants to a minimum.

3. Never post immediately. Create a new blog posting and save it to the Drafts folder. Then go for a walk or sleep on it. Make sure you really want to say what you’re about to post. Even though you can delete postings after they have hit the web, if they have already been read by lots of visitors, you could have created a PR problem.

Real estate professionals can get very creative with their blogs. They are a great way to “drip” ideas into your sphere of influence about buying or selling property. Blogs also give real estate agents a voice on major issues – like rising interest rates, housing bubbles or proposed regulations – which they can use to speak directly to consumers. Updating your blog on a regular basis is even easier than sending out mailings or using an e-newsletter – and may have an even more valuable marketing effect of drawing prospects and clients back to your website every morning to see your latest postings and anything else new today (like a new listing). With some practice and planning, real estate agents can use this blog technology to create momentum and drive traffic to their web site – and add a little personality to their marketing efforts at the same time.

Consider it a wake up call: interest rates are a little higher (but still a 45 year low), inventory is a lot larger and days on market are far longer. Certainly, it’s a crisis but not a depression – homes are still selling. So get over it, and get a strategy in place to sell in this kind of market, because it’s here to stay for a long time. The challenge facing real estate professionals today is the result of the investments they made – or failed to make – during the last decade in sales, marketing and technology. For some agents, the challenge is welcome; they are ready to compete with the latest consumer techniques, online marketing and wireless tools.

For others, the chickens have come home to roost.

Consider that not only the technology has changed in the last few years. The demographics of the sale have dramatically shifted, from a focus on the seller to a focus on the buyer. When the market was seller-driven, the technology focus was on Internet marketing, web pages and managing multiple offers. The average seller in America was a 47-year old whose technology expectations included PowerPoint presentations, online virtual tours and electronic forms. As the market becomes buyer-driven, the challenge is to meet the technology demands of the average 25-year-old first-time home buyer who represents 50% of all sales annually. The technology expectations of this consumer – the Echo Boomer – are substantially different than those of the seller, and many agents will face a scramble to get up to speed. Let’s take a look at just a few of the differences.

Consider that in a seller-driven market, the laptop was a primary technology. Even then, a very low percentage of real estate agents took their laptops to listing presentations, used PowerPoint and possibly went online to demonstrate their web site or show competing inventory. In the ultra-hot market, it really wasn’t necessary to carry your laptop with you. With the marketplace responding to sellers’ needs, the key technologies were email communications and document management. It could even be argued that marketing technology stagnated during this period: a day on the web was all many homes needed to receive multiple offers.

Enter the chickens.

In a buyer-based market, the technology needs shift toward broader prospect acquisition, faster information distribution and mobile communications. Inventory isn’t the problem – so technologies geared toward getting inventory (PowerPoint presentations) and marketing it (web sites) are no longer in the spotlight. Responding to buyers quickly (always-on email) and keeping in contact with them (via wireless messaging) have stepped into the center ring. Prospecting to twenty-somethings is a different game than in the past: postcard mailings don’t impress Generation Y and excessive spam has seriously impacted the ability for email marketing to make a connection to these younger buyers online.

The technology needs of a buyer-based marketplace are so different than those of the past five years that many real estate professionals find themselves back at square one. Here are some of the challenges:

In the past twenty years, email became the primary communication tool of an entire business generation – the Baby Boomers – as well as Generation X who grew up with it. Recently, however, email has become less of a central communication tool for the next generation of first-time homebuyers. Replacing the practice of checking email, Echo Boomers prefer to use instant messaging – on their computers – and text messaging on their phones – to stay in contact with friends, family and co-workers. This “always on” communication tool is independent of the device used: teenagers “IM” each other on their computers, cell phones and even game consoles. Most real estate professionals have rarely used instant messaging and, even then, have only used the basic text-chat with teens away at school. Instant messaging as a marketing strategy with first-time home buyers remains science fiction for millions of agents. Using a program like Yahoo Messenger (http://messenger.yahoo.com) will be a minimum standard of practice in the next few months – if it isn’t already – to keep in touch with modern buyers. Since instant messaging goes beyond text – into video chat, voice chat, file transfers and web conferencing – the opportunities are enormous to revolutionize customer service practices. Yet too many agents today still dismiss instant messaging as a “need to know” technology.

Text messaging is even more challenging because it essentially moves instant messaging off of the computer and onto the cell phone. And let’s face it: ten minutes into a real estate sales meeting demonstrates most agents’ mastery of their phone’s ring tones – let alone experience with its text messaging system. Yet text messaging is a powerful marketing tool (just ask Scion) that ensures your marketing can be delivered whenever, and wherever, your customer is, not just when they are in front of their computers. Text messaging will soon come to dominate new listing announcements, open house reminders, price reductions and even broker-to-broker communications. It’s fast, to-the-point and most importantly, it’s the normal way of communicating for the next generation of buyers.

Continuing the transition from a seller- to a buyer-driven marketplace, technologies that have traditionally been seen as accessories or entertainment will also assert their place in the standards of practice for the future. Using a PDA will need to move beyond simply “carrying around” listing information to the ability to beam it, email it, text it and even present it to buyers whether at an open house, coffee shop or in the car. If the last few years heralded the decline of printed listing sheets and prospecting postcards, the next few will begin to marginalize the era of “online databases” where consumers have to do all the work to sort out the listing data. Mobile devices – from PDAs to iPods – will enable a whole new method of managing listings. Real estate agents have just reached a plateau with accessing data on their own PDAs – imagine what it’s going to take to mobilize that data so buyers can download it on their iPods every morning! Yet, for consumers who buy music by downloading it online, the concept that they’d have to “search to the web” to see the latest inventory will become old-school in an era where the “latest podcast” of news, sports and information is seamlessly downloaded to mobile devices each morning.

The interesting part of this new set of challenges is that none of these technologies is “new.” The iPod didn’t just appear yesterday. Text messaging is years old. PDAs are approaching a decade of business use. The consumer has been purchasing, using and redefining their relationship to many industries – from travel to music to stock trading – with these mobile devices. Entire industries have had to re-tool their strategies for a buyer-driven, consumer-demand-based model of operations. It is perhaps unfortunate that the last few years in the real estate industry have been so supply-sided. The hard work of industry transformation has just begun; sitting right out there with the buyers on the roost.

Fourth time is a charm, at least for Microsoft’s latest upgrade to its ubiquitous Office suite. Since 1997, computer users worldwide have trusted their work to Word, Excel, PowerPoint and Outlook. A decade of editions – from Version 97 to the latest Office 2007 has promised to be easier, faster and cooler. And each time, some functions – like previewing printouts before wasting paper – got a little easier, while other features – like the dreaded mail merge – became almost impossible. Maybe this time, Microsoft got it right? Well, let’s just see.

Since Outlook is the program most of us spend the most time using every day, let’s look at how Outlook 2007 hopes to improve our day. For starters, the single most exciting thing about the new version is that it installed and converted my Outlook XP data flawlessly. That’s a huge success for Microsoft: if a user has to deal with hassles just installing an upgrade, they are usually tainted before even using its new features. But the installation was simple and perfect: Outlook 2007 transferred my mail server settings, setup preferences and every folder without a single hitch.

The main screen of Outlook 2007 is essentially the same as the previous version: the “Today” screen previews your calendar, task list and mailbox summary, with a list of folders along the left side of the screen. This “leave well enough alone” approach helps users leverage their previous experience in basic navigation without too much relearning – which is good because when they start their first email or appointment entry, it’s going to require the rest of their attention. For most of us, the normal pattern is to go from Today to the Inbox view. Seems like someone at Microsoft finally listened to its users, because Inbox got two much-appreciated changes. The ToDo Bar now sits along the right column and features a mini-calendar that also displays the next few upcoming appointments (even if they span the next few days). This virtually eliminates the constant switching back and forth between Inbox and Calendar that plagued the previous version – a great time saver when you’re on the phone with a contact who asks if you’re available later in the day or tomorrow. With a glance, you know exactly where your schedule stands. And just below, the ToDo Bar features a new interactive Tasks window, which likewise puts your daily and overdue tasks right in view. No more forgetting tasks simply because they were hidden on a separate screen. Tasks also get a few nice changes: they can be color coded and grouped more easily. And the Follow Up button is much more effective than the last version: it features quick-picks like Tomorrow, This Week, Next Week, and custom date selections that make it fast to schedule follow ups on appointments, emails and task entries.

Many things stay the same in Outlook 2007. The various modules like Calendar, Contacts, Notes, remain as buttons in the lower left under the folder tree. Likewise, the folder tree retains most of the functions users are familiar with, including the Favorite Folders window at the top and Search Folders which can be customized to monitor any kind of message criteria, no matter what folder they are stored in (my favorite is a larger than 500kb search folder which quickly finds all those pesky messages with large attachments that are clogging up my storage). Search boxes remain in the button bars across the top. And all windows can be arranged, sorted and filtered just like in the past.

So where’s the new stuff? Well, just pick any function and you’ll get an eyeful of changes. For example, the new email interface looks like someone squished Word and Internet Explorer into the email window. For starters, all functions now feature a tabbed interface. So “menus” are disappearing in favor of “tabs” which change the button bars entirely and display all options across the bar (rather than a drop-down menu). With the tabbed approach, Microsoft has more space to place BIG buttons in your view, which is especially nice since common features like Attach File now appear as a LARGE paperclip with the words beneath it. Microsoft hopes this will eliminate the kinds of technical support calls that start with “I can’t find how to…” for common functions like attachments, signatures, spelling and follow-up. Of course, putting so many functions and tabs on the screen could cause the opposite effect, as users get cross-eyed trying to absorb it all, but heck – that’s what technical support is for, right?

The coolest features are in the new email body options. Essentially, it’s Word in there, so users will find their words auto-corrected as they type, bullets and numbering automatically respond if you start creating a list and text enhancements like fonts, alignment and colors use the familiar Word buttons. The Options tab takes the “look and feel” of messages one step further, by letting users preview and apply entire themes of colors and fonts to the message with one click. The Insert menu also has a few goodies to make life easier. Finally (finally, finally, finally!) there’s a big button marked Picture which embeds an image directly into the body of the message with little fuss. And the photos are automatically setup for anywhere placement, which means you can click and drag an image to any location in the body of the text (not just stuck on the “line” it was inserted on) – definitely a plus for anyone trying to make a quick listing announcement or insert their company logo. There are even instant “photo formatting” buttons that add shadows, frames, borders and other effects to images with a few simple clicks. The coup de grace comes when users try the new Insert Smart Art button. Microsoft has created a library of graphical metaphors – like three-item lists, arrows and circles, process diagrams and other imagery that users can customize with clipart and text right in the body of the message. Imagine a mortgage broker using a “three step” Smart Art image to create a quick marketing message for first-time buyers – then emailing it to his prospect list by adding a distribution list to the BCC: line. E-Marketing will never be the same – and it’s about time.

But wait: there’s even more! Click the Calendar to see your schedule any way you want. Do you like to see three days at a time? Four? Two? Choose your own layout – plus add the task-pane at the bottom of the days, so you really see your workload, not just your appointments. A very cool Search Calendar box instantly finds every appointment and tasks for any search string you enter – for the entire calendar year – and displays it in a simple tabular list. Move over to the Contacts folder and it’s even easier to work with your database. Common tasks like following-up, creating appointments and assigning tasks to contacts are all buttons: no more hunting through the old Actions menu. And all of the graphics and text features are retained for the “notes” section of each contact – so you can enter shapes, diagrams and lists into each record as you make notes during calls and meetings. And lastly, a cool feature added to the Notes (which still look like electronic post-its) lets you attach a Contact to a sticky-note, so it can be found from the contact record later by clicking the Activities button.

In all, the new Outlook 2007 definitely delivers an improved user experience. More organized views, customized searches and powerful graphical features for email messages make it much easier to do most of your daily work directly from Outlook without using other programs. Even behind the scenes – like creating signature files or setting up junk mail filters – Outlook 2007 simplifies functions even while adding new options. It has been more than four years since Microsoft last updated its Office suite. Having used it now for a couple of weeks – I’d say it’s been worth the wait.

Real estate professionals should be upset today. A terrible blow for the integrity of the real estate industry – for housing as a foundation of personal equity and wealth, for the rule of law in mortgage lending, for simply doing good for ordinary Americans – has just been dealt by the government. A so-called “great compromise” has just laid $300 billion – financed by Fannie Mae and Freddie Mac – in bad debt at the footstep of the taxpayer. According to the Wall Street Journal:

The legislation combines the regulatory reforms for government-sponsored enterprises Fannie Mae and Freddie Mac with a proposal to use the Federal Housing Administration to offer up to $300 billion in federal guarantees to help refinance struggling borrowers into new mortgage loans.

One compromise proposal discussed last week would use the money from an affordable housing fund created from Fannie Mae’s and Freddie Mac’s earnings to help pay for the FHA guarantee program.

This program spells disaster for the real estate industry in a number of ways, including diverting “money from an affordable housing fund” to refinance unsound borrowers. If anything, that should have REALTORS crying foul, considering how much time they spend extolling the virtues of affordable housing across America. Worse, by using taxpayer money to refinance bad borrowers, the government is sending a signal that the real estate industry is essentially a joke: Don’t worry about pricing your home right, putting money down or building your credit: Uncle Sam will bail you out no matter what. With that logic in mind, why doesn’t Uncle Sam simply put the nail in the REALTOR coffin and say, “Oh, and don’t bother paying your REALTOR a commission, either; Apparently nothing they tell you really matters because we’ll come to the rescue if you decide to completely ignore their advice.”

If real estate brokers really want to find the bottom of the housing market decline, pouring public money into the flames won’t douse the fire: instead, it will fuel another round of speculative borrowing and shore up – rather than clean out – borrowers who will ultimately default anyway. All the proposed bill will do is put off for another day the rain. Real estate agents should know this – because buyers certainly do. The main reason many buyers are waiting on the sidelines these days is that they expect the market to fall further – and they aren’t wrong. As long as Uncle Sam keeps pouring money into a false credit market, buyers can be assured that when the bottom finally comes, it will be that much lower.

Any government action to let Fannie or Freddie lower their rates, loosen their application standards or simply refinance bad debt (rather than call it in) damages the housing industry and American homeownership. When Uncle Sam purchases bad loans, he’s purchasing the right to the assets as well: Which means Uncle Sam is nationalizing large swarths of homes across America. Rather than private property, more so-called homeowners (really renters) will be living in government subsidized housing. It’s a massive movement to socialize housing. And Roosevelt couldn’t have done it better.

REALTORS should beware. Once Uncle Sam owns most of the housing in America – or even large parts of it – they are going to end up like doctors who have to deal with Medicare. Fixed reimbursements will take the place of their market-driven commissions. They’ll have to take whatever the government offers them – maybe $300? – when they do a deal with a seller whose mortgage (and therefore home) is owned by the government. Already dealing with HUD homes and government auctions means lower income opportunities for REALTORS – that’s why so few of them do it. What happens when – someday – that’s all there is?

In the technology world, nothing is dull like yesterday’s news; unless the old news was right. That’s the case with the story of a technology strategy that might have made all the difference today, if only more brokers had taken it to heart. So it is that the “virtual office” is back in the news, which too many going-broke-brokers and paper-drowned-agents wishes they paid attention to last time.

Didn’t the virtual office take off, you ask? Doesn’t everyone have a laptop, PDA and wireless email device? Sure, if we’re talking about college kids – but not the average agent in the average real estate company. NAR studies still show a mysterious 5% of agents don’t report owning a cell phone. Less than half of agents own a PDA newer than two years old and barely 20% are checking their email wirelessly. Brokerage infrastructure is hardly any better these days. Most brokers suffer from advice from over-cautious IT geeks still worrying about “security” rather than cost-efficiencies of installing wireless routers in their offices. Only a tiny fraction have created secure virtual networks or intranets so agents can access to email and marketing materials from home.

They real killer is found on Main Street, USA, where so many new physical offices have popped up in the past few years. It’s fairly clear that, in the heady days of a superheated market, the virtual office virtually disappeared as the business strategy of the future.

For too long, little attention has been paid to technical efficiencies, since the past few years survived on an increasing supply of licensed bodies that kept pace with skyrocketing markets. Yet in a post-Greenspan world, cooled by an inflation-anxious-Fed, soaring operational costs are back in the cross-hairs. Swelled inventory is pushing advertising expenses out of control. Brokerages are filled with tech-challenged print-hungry practitioners. And average take-home transaction dollars have fallen to earth, no longer insulating everyone from their own follies. To be sure, everyone “remembers” the internet – and somehow expects it to provide a miracle to save their operations. But when inventory continues to find itself in expensive print advertising, surely, the bill – for all of these inefficiencies – is coming due.

Peter Drucker once quipped, “Why should people who, for ten or fifteen years, have been competent suddenly become incompetent? The reason in practically all cases I have seen is that people continue in their new assignment to do what made them successful in their old assignment…” Nothing could be truer for the real estate industry today – as it faces its “new assignment” of a normal marketplace – except that many practitioners no longer have the luxury of glossing over the issue with an excess of easy transactions. Brokerages must now undergo, by fire, what they should have done by leisure: The rapid transformation of their operations in order to survive a cost-conscious market. And nothing will be more central to this transformation than the return of the virtual office.

Virtual offices aren’t new or nebulous. They exist across many sectors of the economy that did not have a budgetary free-ride period over the last half-decade. Stock brokers, travel agents and call centers have all taken advantage of the work-from-anywhere opportunities of a virtualized infrastructure. They have transformed their practices into lean, fast-reactive organizations based upon the instantaneous flow of information – and most importantly, unbound their corporate performance from a particular place and time. As brokerages and agents begin similar transformations, a few key concepts can help usher in these changes:

1. Centralize online. Any knowledge-based organization – which is the essential component to competitive real estate brokerage – needs to collect and make available its strategic, tactical and time-sensitive knowledge to all agents, all the time. This will require a dramatic shift in organizational theory: most brokerages are built around the concept that floating free-agents will somehow pull together the resources they need to complete transactions, usually independently of – and sometimes in contradiction to – the overall needs of the brokerage. What’s worse, many companies have invested heavily in technologies that only a bare few of their company utilize – or have reinvested in traditional mediums like office space and television at a time when the demographics of consumption has shifted to instant messaging and cellular marketing. In the past, the centralization-gap has been evident in simple everyday differences – such as agents’ databases (say, Top Producer) and brokerage databases (say, Access or Exchange). Essential information – consumer and transaction data – largely remains in-transferable between parties supposedly working together to achieve a transaction. In the virtual office, this information-schism must end in order for all parties to apply their knowledge to the art of the deal. Brokers, agents, consumers, ancillary parties and corporate support staff all must have instant and complete access to transaction details. Such access must be uniformly available by any method (according to the skill of the person): desktops for office-bound staff, laptops for brokers, wireless PDAs for mobile agents and secure web-based intranets for third parties. So offices must learn to virtualize their data: Centralize forms – so agents have access anywhere, fill in blanks and permanently store them in transaction accounts without ever printing a copy. Centralize marketing materials into one repository – so time-sensitive listing appointments and buyer information requests can be responded to with PDFs and templates within seconds not hours.

1. Standardize. Standardization is the corollary to centralization and a key component to the virtual office’s ability to keep everyone coordinated across time and space. Standardization will simplify deployment, training and technical support for all new technology, and even for sales techniques. Consider that entire sales forces exist – for example, at telephone companies – with people working from home but using the same technology and sales techniques to handle any customer at any time. Standardization must do the same thing for the real estate “brand” – which must become a brand of practice, not just marketing image. Standardization will also make possible economies of scale when purchasing new equipment. Countless brokerages and agents have suffered the consequences of owning different models of computers, cell phones, PDAs and digital cameras throughout their organization. Different models make it harder to provide training, amortize technical support costs and get discount pricing when upgrading. At a basic level, lack of standardization inhibits knowledge-sharing amongst your agents: they cannot share techniques and tips if they have dissimilar technology.

   Standardization is also a powerful multiplier for marketing efforts. For example, having all agents use the same corporate email domain ensures consistent marketing of your web site (@company.com) to consumers via thousands of communications each week. Standardizing e-marketing efforts – such as using marketing templates that conform to company sales standards– also prevents diluting your brand by errant practitioners.
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2. Eliminate. Redundancy must go first, especially in areas for which agents do not hold expertise. For example, unless thoroughly trained, agents should avoid photo editing or desktop publishing; and crucially avoid the mail merge. A decade of technical support calls demonstrates how agents still have yet to master these activities – so they should be kept from wasting time attempting them in the first place. Virtual offices must reduce every redundant activity to bare minimums of keystrokes and time. Marketing activities should be automated down to 10 minutes or less – and should rarely involve retyping any information already entered into a corporate database or MLS system.Likewise, the virtual office should force the complete elimination – not just time reduction – of every form of expensive activity you know should disappear but have yet to remove (such as postal mailings). Undertake an elimination campaign for waste of all kinds – print, paperwork, data entry, cliché marketing, anything incongruous with running a cost-effective virtual organization. To start, ask yourself: if we didn’t already do it this way, and were opening a new company, would we choose to do it this way in this day and age?

Much bemoaning of the cooling market can be heard throughout the industry today. The greatest misunderstanding, however, is that somehow competitive opportunities are “down” – even while gross economic activity is up, unemployment remains low and credit steadily available. Companies pining for the easy-pickings of yesteryear will only be the first to go; even past downturn-market survivors risk elimination in the coming storm. Only by redefining what it means to operate in the real estate marketplace of the future – starting with fundamentally embracing the virtual office – will the future movers and shakers be made.

If you’ve ever wondered if your technology strategy really makes a difference, a article from the archives at RealEstateJournal.com should make the point. Titled Amid Slump, Real-Estate Agents Hang Up Their Blazers, authors Hagerty and Athavely provide a glimpse of a real estate industry filled with $37,600 average-income agents. Their brokers fare not much better, trying to carry the expenses of 20-25% agent over-capacity. Looks like another year where one out of four agents call it quits.

Before you start jumping for joy, thinking that less agents in the business will mean less competition for you, reconsider: Less agents means better competition from those who remain. Working the boom market is not so hard, with a heartbeat and a license, many inexperienced agents beat the odds. But sticking around through tough markets requires serious players. The competition will be well-trained, well-financed and most likely, well-versed in the technology that keeps them competitive. Talk about tough times!

That’s why technology matters more than ever. When markets tighten, competitive advantages are critical. Enhanced technology skills provide competitive advantages across every segment of your business: prospecting, leads generation, communications, marketing, transaction tools and client relationship management. Every one of these areas can benefit from technology that saves time, cuts costs and expands opportunity to maximize the market. And with incomes for agents and brokers dropping with the market, technology mastery becomes more critical than ever.

If you’re planning on sticking around this year, it’s time for your technology to start making a difference. Here are four areas you can focus on right away:

1. Customer acquisition. One of the greatest expenses for real estate professionals is the cost to find new sellers and buyers. Let’s start with some honesty: you’re never going to pick up the phone and cold call prospects; your postcard marketing is a passive-aggressive waste of time; and your newspaper advertisements aren’t going to entice buyers who can’t translate that a “3br/2ba/lgdnrm/frog” means a big home with “large dining room and family room over garage.” Even Agent Moneybags can’t keep throwing this kind of money away; we’ll be calling you Polly PastAgent soon enough. If you’re Sally CyberExpert, then it’s time to unleash the web. Ask yourself this: Who is currently interested in selling their home? Umm, how about all those for sale by owners online? Good; now start looking them up on their websites and emailing them. There’s a list of people who have already made the mental leap to sell, and have an 88% likelihood of ultimately working with a real estate agent. No, they don’t want you to call, and your postcards are silly; Talk to them the way they are telling you they want to hear from you: by email. (Hint: they are marketing on the web.) And since these people will also be buyers, the same technique applies if you’re hunting for customers. Use the web (and forget about them coming to your website – which they can’t find. Waiting for customers to register is the ultimate in sales passivity.)
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2. Communications. The Baby Boomers have already told us their technology preferences: don’t call them, email them (hint: the Do Not Call list). Surveys of Generation Y tell us that, offered the choice, they’d give up email in favor of text- and instant-messaging. So if you’re going to talk to potential clients this year, it’s going to be by some form of ‘messaging’ and not phone calls. Good news, because you can drop your cell phone bill and cut costs, while using mobile email and text messaging to reach more contacts. Text message your open house times and locations to buyers on Saturday; use an email blast to alert customers of a price reduction on your listing; tap an instant message to your assistant while sitting in another dull agency class. Business runs on communications – and it’s time to lower the cost while expanding the opportunity by using a Blackberry or other convergence device. In fact, as competition heats up, what you really save with “messaging” technologies is time. Some estimates put the average time-saved with mobile messaging at two hours a day! That’s where your technology can really put pressure on your competition – by providing you two more hours every day to list, sell and prospect, while the other guy is still leaving a voice message or logging into his email at the office.
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3. Marketing. Text on the web is dull. Snore. Boring. Old school. Today’s most competitive web sites – in every industry – are alive! Video, sound, interactive tools, instant chat with real people – each of these technologies creates comparative advantages to the “read-me only” websites. Most real estate websites today are glorified Sears catalogs. Text describes the property, some photos (many, if you’re lucky) display the rooms and a fish-eye-nauseating virtual tour makes buyers blurry-eyed. If marketing technology is going to make a difference this year, it’s time to make your websites grow up – and that means multimedia. First, cut the costs of creating virtual tours by downloading free software like Microsoft’s Photo Story 3 which turns any sequence of photos into animated, voice narrated video clips. Add them to websites, listing presentations and even email marketing. If you’ve already taken 10 photos of the property yourself, the cost to create a virtual tour should be zero by using some software like Photo Story.Next, start selling your listings using your voice, by creating a daily podcast and letting prospects subscribe to your updates. Today’s first time home buyers go everywhere with their iPods, which contain daily downloads of news, sports, discussions and even video clips. Savvy brokerages should develop a “daily show” style of podcast that consumers can add to their iTunes for regular updates. Think of it like a “talk show” for your company – discussing listings, interviewing past clients, educating consumers on finance issues – you name it. It’s like marketing on the radio without having to pay the expensive broadcast fees. Adding a podcast to the web is about as hard as going to Yahoo Podcasting (http://podcasts.yahoo.com) and buying a good headset.
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4. Client Relationship Management. Start by dispelling a myth: Sending canned stuff to clients every week is not client relationship management. Contacting them regularly to maintain relationships is. Understanding this will help you use your campaign-manager technology far more advantageously than simply email-blasting some dull templates every week like, well, a dullard, that’s what! Using technology is not selling; it merely enhances the sales process. So what do most agents need to do to use technology to maintain relationships? A reminder on their calendar. No, really: that’s all you need. A regular reminder on your calendar to reach out to your past clients and current network and refresh your relationship. Trust me, they really don’t need to receive your recipes or your insights on the current market every week. Sending canned stuff simply reinforces the idea that you’re a commodity vendor, using mass-marketing techniques to troll for numbers. If past clients really trust you, they’ll come back to you for your insights when they need it. But only if they remember you, which is where technology should focus. Using something as simple as a recurring task reminder in Microsoft Outlook, you can pick two times a month to scroll through your client list and reach out to them personally. If you think you won’t have time, remember the two hours a day your Blackberry is going to save you, and apply some of that time to managing your relationships and generating referrals. And yes, you can still send an email (or even use the phone) as long as it’s personal.

So just to be clear: the market is still sagging, the industry is largely bloated and the average agent doesn’t make enough money to waste it on old-school sales habits. History shows us that these are the times where simply trying harder won’t protect you. You’re going to have to try smarter – and use technology to make up the difference.

No other tech tool has been more widely adopted by real estate professionals than the digital cameras. While the recent NAR survey of its members showed a paltry percentage had adopted wireless email devices, the digital camera ranked near ubiquitous with agents. And while some sales professionals still only see the camera as route to bankruptcy (ie., printing flyers and postcards) the fact remains that today’s digital cameras make it possible to market properties better, faster and cheaper than ever before.

Even though most digital cameras will last for years, newer models make a compelling case for upgrading your camera. Features such as larger LCD screens, better resolution and easier photo transfers easily outweigh the cost of buying a new model. Even in a smaller package, today’s digital cameras offer larger features – like multimedia movie modes and panoramic modes – that savvy sales professional can turn into marketing opportunities. With great models in the $300-500 range, it may be time for top performing agents to look at the options.

For starters, today’s digital cameras are much smaller than models from a couple of years ago. Some of us might think that means they’ve become harder to use – with smaller buttons and menus – but the camera companies have become very clever. Critical items like the shutter button remain large and easily accessible; but other buttons have dissapeared altogether, helping to reduce the camera’s size. Instead, most selections such as resolution size, flash options and digital effects have become electronic options on the LCD screen. So less buttons and sliders but more choices, in an electronic menu. By changing from a physical configuration of buttons and sliders to a on-screen menu, the camera companies have also been able to increase the amount of LCD space on the back of each camera. For example, the Canon PowerShot SD 750 has a 3-inch LCD screen on the back – easily an inch larger than models a year ago. Not only does the larger LCD make it easier to stage a shot, but the real value of the larger LCD isn’t for taking photos: it’s for showing photos to buyers you meet on the street. So the larger LCD really transforms the camera into a portable virtual showing tool for agents. Imagine bumping into a buyer and showing them photos of your listings – and any other listings you may have visited – without having to pop open your laptop or drive them around town. Suddenly your digital camera saves you time and money marketing listings – and you didn’t even need a printer!

Next, consider the upgrades in camera resolution lately. Many models boast 7, 8 or even 10 megapixels. Now, let’s be clear: the most common reason you would want higher resolution photographs would be for printing images. And sure, there are plenty of us who are still committed to making the ink-cartridge companies richer. But that’s not the most important reason to be excited about higher resolution cameras. The benefit isn’t for still photography but for movie modes. Higher resolution cameras translate those improvements into better multimedia clips. Whereas older models could take a fairly decent but almost always small-size movie clip, newer models make it possible to take higher quality clips that can be expanded full screen without losing their quality. With VGA and higher movie settings, your digital camera can empower better virtual tours on the internet and presentations on your laptop. No more 2 x 3 inch movie clips. Rich, full-screen tours of up to three minutes – including sound and narration – are now everyday opportunities with newer cameras. And since you’re using the same camera for still shots and movies, you can get multimedia online faster because you don’t have to wait for someone to come out to your listing with a tripod and fisheye lens. Just point, shoot, walk and narrate: your movies can be online within minutes.

Speaking of lenses, newer cameras have virtually eliminated the need for add-on lenses. Not only does this keep the camera size small, but it lowers cost by putting commonly requested lense features into the base units. For example, many agents frequently require “wide angle” shots for their listings. Sure, they could take two photos of the same room, but for some reason, they feel the need to go iguana in their marketing. So, to accommodate this, newer cameras feature an electronic “panoramic” mode. Agents start by shooting the right side of the room; the camera then “freezes” that portion on the screen and splits the screen down the middle. The agent then realigns the shot to the left of the room, matching up the split-middle, and shoots again. The camera instantly “stitches” the two halves together creating one wide-angle shot. No lenses needed: it’s all electronic.

In addition to better photo taking tools, digital camera companies have also worked hard on improving photo transfer and distribution tools. Gone are the days when cameras needed docking stations or cradles. And even the everyday USB cord is being replaced with more convenient ways of getting photos out of your camera. For users with newer laptops that feature memory-stick readers, the most convenient method of getting photos out of your camera is simply to pop out the camera’s memory stick and pop it into the laptop. The memory stick acts like a big “floppy disk” storage device. Users simply drag and drop photos from the memory stick directly into emails, flyer software or a folder on their computer. Kodak has gone a step further and decided to eliminate the “hardware” part altogether: no cords, no memory stick transfer, nothing manual. Simply press a button on the Kodak EasyShare One and photos are sent via WiFi wirelessly to your computer. And since Kodak uses the standard WiFi protocols, the camera can even transfer photos directly to compatible printers and even the internet over public hotspots (like in a coffee shop or hotel conference center). Wireless-enabled cameras act much like your cell phone’s camera with the ability to distribute images along networks in the office or on the road.

If all of these cool feature upgrades aren’t enough, then consider the latest trend in digital photography: Web broadcasts. Some new models from Pentax and Vivatar are leading the industry with integrated web-cam features, making it possible to use your digital camera as video a conferencing tool over the web. For these models, a small tabletop tripod is recommended, but a simple USB connection enables users to point the cameras at themselves and enhance their instant messaging sessions with multimedia broadcasts. With a broadband internet connection, web-cam enabled models will transmit about 30 frames per second – more than enough for a decent video experience with clients and prospects.

For the past few years, the internet has dominated the buzz for real estate marketing opportunities. Yet it remains the digital camera that makes so much of our internet marketing interesting and compelling. Adding 20 photos to our listings and delivering real-movie-style virtual tours is what makes online marketing more than just a few paragraphs of classifieds text. Offline, the digital camera continues to be the critical tool for empowering our marketing as well. From showings in your pocket to video tours on your laptop, modern digital cameras are sure to delight your customers and clients.

Here’s a really simple idea for REALTORS who are struggling to sell “overpriced listings.”

Just Say No!

Call it the Nancy Reagan Rule of Real Estate: Some listings are “bad” for you – kind of like certain kinds of substances are bad for you. But sometimes, we REALTORS just get on a “listing high” when we get a homeowner all geared up to sign on the dotted line. After pouring our our hearts in a listing presentation, filled with facts and figures and advice, we become momentarily vulnerable to a moment of insanity called “I’m gonna get this listing!” And that’s when we all-too-often shoot ourselves in the foot.

Every REALTOR “knows” better than to take an overpriced listing. But they need to start “doing” better if they want to survive the downturn. Here’s a simple economic fact: the buyer of any product sets the price. Period. No ifs, ands or butts, unless you’re a one-of-a-kind painting or bejewelled egg. As long as there are “other options” in the marketplace similar to your product – other computers, MP3 players, airline seats and houses – to choose from, the buyer sets the price.

REALTORS need to start every listing presentation with this fact. Here’s a simple way to do it:

Help the seller see that they don’t really exist. Not as “sellers” anyway. Sure, they are “momentarily” selling their home, but as soon as they sign the listing agreement, the really become buyers. If we sell their home, they are going to have to move out and get a new home. So all sellers are really buyers!

As potential-buyers, pre-signed-listing-agreement-sellers already understand that “they’re going to get a good deal” on their next home. They full expect to “control” the process by “making an offer” and “lowballing” the sellers. Of course, they also – insanely – think that these “buyer emotions” don’t apply to their home. Nosiree! Buyers are going to line up – from your newspaper ad, mind you! – and pay full price for this-here-beauty of a home!

When you help sellers see that they are really buyers, then they will be able to “make the leap” to understand that what they are thinking is exactly what other buyers are thinking about their home right now! If the buyer feels that it’s overpriced, then it is. Peroid. They’ll shop around. You can’t make them overpay. Just try calling your broker and putting your Bear Stearns stock on the market with an asking price of $80. Sure, you paid $80 for it; but nobody is willing to buy it from you at much more than $8.

So the buyer always controls the market.

Never mind your dog-and-pony show about how you’re cool, you have a great company, your website rocks and you even have a Blackberry. None of that should even be discussed until after you have determined the sanity of your seller. While it’s no secret that there are “emotions” in the sales process, you can rest assured that there are some glimmers of pure reason, too: especially with tight credit and more cautious buyers. Compared to the “bid up at all cost!” days, buyers are downright Mr. Spock these days when it comes to making an offer.

You can “say” all of this all you want in a presentation; but until you get a seller to see themselves as a buyer, you are talking to yourself. You know that an overpriced listing will take months to sell: there are too many choices out there, some at “distressed” prices and “super discounts” from builders. Paying above-market for an older home isn’t a “steal” any more.

More importantly, it’s part of the “REALTOR, heal thyself” mentality that we need to spread throughout the industry. Nobody “forces us” to take bad deals. We do it to ourselves; which means we can stop, too. Who cares if you don’t list the property? Really – do you “need” to throw away your marketing dollars so easily? Are you so bored that you “want” to sit at open houses where buyer after buyer tells you it’s overpriced?

Figure it this way: you can always co-broke the deal on a buyer’s behalf – and let someone else “list” the property and assume all of the up-front costs. In fact, since sellers seem quite keen to “do it themselves” sometime (the FSBO phenomenon is high amongst many sellers) you are really in a good situation. Why take on the expenses of a money pit? Just focus on finding a buyer. You can keep up with the FSBO market just as easily as the REALTOR-market using the web (like owners.com). At some point, a highly distressed listing agent – who’s going broke carrying the overpriced inventory will beg their client to take ANY deal you bring them. Same for a languishing FSBO seller.

In the meantime, you’ll get back to making profits. If you only just say NO.

Here’s a real dilemma for real estate companies today: Can their agent successfully build relationships with the next generation of real estate buyers? Right now, honest brokers would have to answer a “qualified maybe at best” if we were to take a look at what they’re doing to prepare their agents for the 45 million Generation Y buyers starting to enter the housing curve.

Let’s start with some data: Generation Y is in their 20s. Graduating college, these kids are the new first-time home buyer. No, it’s not Gen X anymore; there are a few X’ers who still won’t get out of the house, but the bulk of newbie buyers are Y’ers. What do we know about them? First, they are highly networked. They have grown up online, playing online games with friends thousands of miles away, online. Their social circles are highly structured – they went on “play dates” that mom setup with their friend’s mom – and they only make new friends by “adding” them to their official page of friends online, at MySpace. They have had a cell phone since they were 10 and they don’t make calls on it. They fully expect IM to replace email and think voice mail is what Edison used to tell Watson to “come here.” They get a constant flow of information by text message – updates from friends, weather, movie times and sports scores – and they don’t “check” the internet because they are always connected to it. Speaking of the dial-up days of the internet is like remembering the Pony Express.

It gets harder, because it’s not just about the technology barriers between Baby Boomer REALTORS and Gen Y buyers: it’s a cultural thing. Boomer REALTORS are like barracuda: the good ones, at least, typify a kind of Type-A, in-your-face loudmouth that marks most of the Boomers. Remember, the low-end of Boomers curve are only 50s today. They watched the first reality television 20 years ago – The Real World – which pioneered two decades of “in-your-face” social behavior that culminated in their Ultimate President – the one who redefined the meaning of the word “is” and perfected the art of character assassination. So Boomers speak their minds and are always right: Which is why they simply hang up on any buyers who won’t tell them their name and instantly agree to lifetime loyalty the first time the agent takes them to see a property.

Generation Y is the complete opposite. They are the most docile, “can’t we all get along” play-nicers in a hundred years. They don’t like to get controversial, because they went to schools where their (Boomer) teachers told them everything was the same, just as good as anything else, and we don’t want to hurt anyone’s feelings. So something as simple (to Boomers) as haggling over the price of a car completely intimidates Gen Y. While Boomers idolized a James Dean punch in the mouth, Gen Y’ers tried to “understand the feelings” of the playground bully and bring him into the group. Clearly, the kill-or-be-killed sales tactics most of today’s REALTORS practice aren’t going to work with Generation Y.

Coming from a super-structured, ultra-safe, uber-nice childhood, Generation Y further complicates the home purchase process because they don’t do it “on their own” the same way Boomers and Gen X’ers did. Gen Y is a co-dependent purchaser with the most unlikely of creatures: a Baby Boomer. Gen Y co-purchases everything with either a parent or a trusted friend from the 45-plus age bracket. They hang out and entertain with their parent’s friends. And while they fully expect Boomers to pay for their major purchases, they also don’t make a decision without them. So the Open House is about to get a whole lot stranger: Boomer agents shouldn’t make the mistake that another Boomer Buyer has arrived dragging their kids long with them when it’s actually the other way around. And while today’s REALTOR may have had experience navigating the “co-purchase” between married couples in the past, the power-desire dynamics of child-parent is going to be an entirely new sales frontier.

Are there solutions? You bet. First, get the right tools – Blackberry, IM account, social networking account – and get beyond grudgingly using them. Second, learn a critical lesson about sales: great salespeople possess high emotional intelligence. If you have ever attended an Integrity Selling course, you know that this means that great sales people change their approach to match the style of their customer. The days of “my way or the highway” sales are over. If you don’t give Gen Y complete access to listing inventory, they’ll find someone like Zillow to do it for you. If you expect Gen Y buyers to call you back, they’ll find a Gen X’er agent who at least can chat with them on AIM. If you think AIM is still toothpaste, then just pack it in.

But most of all, what Generation Y will teach us – and already is – about real estate sales is that the ultimate transformation is about to happen. Twenty five years ago, it was a broker-centric business: everything revolved around the broker. Then we had the agent-centric ‘80s and ’90 where it was all about you, baby, right into the new millennium where the consumer-be-damned because we could make sales without even trying. What did relationships matter when there was a line of buyers bidding for homes? Why call anyone back when they were calling you? Who needed the internet when you barely put a sign up and had an offer? Buy a Blackberry – only if you needed an extra tax write off from all those easy sales!

Pop. What Generation Y real estate buyers are about to teach us – finally and for good – is that real estate must learn that in sales, it’s all about the consumer. REALTORS are about to get a two-decade lesson on that fact – and for many, the hard way.

TTYL

Regular readers of this column may remember the installment, No Photos, No Buyers, No Kidding, where I exhorted real estate agents to make every effort to upload multiple photos to every listing on their website. Back then, the argument was that online listings without photos were about as useless as jargon-abbreviated classifieds in the back of the newspaper. Truth be told, the consumer vindicated my efforts, with the NAR’s annual buyer survey reporting that the consumer ranks multiple photos as the single most important data they seek from online portals. Some real estate companies have gone so far as to mandate multiple photos as a pre-condition before a new listing will appear online. And yet, while any search (try one now) of REALTOR.COM will still find plenty of listings without photos, tremendous effort has been made by most agents to saturate their listings with photos and virtual tours.

Now, however, I’m ready to admit that I was wrong. I concede defeat. Throw in the towel; anything you wish, if you’ll just stop putting more photos online. Please!

What has made me change my mind? Just look at some of the photos now ruining the real estate space online and you’ll join me in throwing up your hands (or maybe just throwing up). And if it weren’t so serious, it would border on ridiculous. And agents, apparently, can’t see it for themselves. Let me illustrate:

Agents ask me all the time why I think their listings don’t generate leads. There are lots of reasons, to be sure: No buyer is going to inquire about an overpriced listing; nor will they be interested if your description is typed in all CAPS. But the real killer comes with the initial presentation, such as this “opening photo” from a recent new listing.

And it was not alone, accompanied by others, each more gruesome and more grisly than last (all of which can be found on my blog). Could any seller have been so adamant that their property be photographed immediately that the listing agent couldn’t have persuaded them a day for cleaning?

And what is it with the persistent desire to photograph toilets? Look: the modern buyer pretty much assumes that indoor plumbing accompanies most homes. Unless it’s missing, there’s almost no reason to photograph the bathroom. Perhaps opulent bathrooms in luxurious listings deserve a digital click or two. Yet most listings waste valuable online space – and do considerable effort to cause buyers to leave the website – by displaying such gems as moldy bathtubs, drab sinks and the ever-present shower-curtain.

Ironically, such images do not even indicate a lack of technical ability: each seems well framed and usually well-lit using the digital camera’s zoom and flash features. And given that most listings with bad photos have multiple bad photos, it’s clear that the agents have mastered the ability to extract their images from the memory stick and transfer them up to MLS. No, nothing technical seems to be the issue here.

Now, let’s not pick on just the photographer. Certainly beauty could be found in eye of the beholder: which might be an explanation for vast quantity of boring ‘front-door’ photos. Except that a quick tour down the “thumbnail” photos on REALTOR.COM leaves prospective buyers wondering whether the REALTOR sells homes – or mailboxes, trees and driveways.

If it’s true that a picture is worth a thousand words, then the story being told by these images online might be better told by Stephen King. Every one of these images was taken directly from REALTOR.COM; there was no need to make any of them up; most came from listings above $750,000. Yet even if the property were a “fixer-upper” there’s no reason to showcase the moldy tub; somewhere there had to be a shot that put the property in an acceptable light. Was it a question of agent competence, or taste, or simply disinterest? I’m thinking it was more along the lines that agents continue to misunderstand the awesome power of the online image – and its direct impact on their ability to generate leads. I’m guessing that the sellers would be shocked if they saw these photos representing their homes for sale; I am certain that most buyers would be sufficiently amused to disqualify them from further consideration.

So I’ll raise the white flag; I admit I was outflanked. After fighting the battle to get every agent to put more photos online, I’ll admit they have won the war.

Fact: 24% of Buyers found the home they actually purchased on the internet last year.

Fact: 80% of consumers stick to the first agent who “responds” to them.

Fact: 23% of real estate agents have an email capable phone.

Fact: You can’t make sales to consumers you continue to ignore.

First, let’s just put your first objection to rest, shall we? Blackberries aren’t expensive. Shhh. Zzzt. Shtttt. Zip it! Any excuses that it “costs money” to get a Blackberry tells me that you just don’t belong in real estate. Is your business down? Cash flow a little slow? Well, so is business at cellular phone companies – that’s why most are virtually giving away Blackberries and other smartphones in the hopes that you’ll upgrade your plans and pay for some data services. Oh, well, then: doesn’t that mean that it is expensive to own a Blackberry, smarty-pants? No, dolt: You’re paying $99 a month now for too many talk-time minutes (you’re not using them phone prospecting buyers, are you?). When you get your Blackberry, you’re going to simply switch to a 50/50 plan: $50 worth of chatting and $50 for unlimited data and email. Same bill. Better business opportunity, though. Remember, Generation X prefers email and there’s no way Generation Y is going to pick up the phone to call you. No chance.

But you can check your email from your home computer. So why do you need to check it from your cell phone? Simple: You don’t do listing presentations or showings in your home office, do you? You don’t go on silly broker-caravan from your living room, do you? You don’t run delivering appraisal documents like a courier to your buyers from your kitchen, right? So your home computer – and office computer – is useless as “email” stations because salespeople shouldn’t be sitting in front of a computer. They should be out making sales – and they should have the “computer” with them.

And since you’re still whining about carrying around your “heavy laptop” because you bought the one with the super-large movie-player screen, not the ultra light sales person tool, you can’t possibly convince me that you’re going to check your email on your laptop. When was the last time you even took it to a listing or an open house? Right. Case closed. Get the Blackberry.

Did I mention that you can look up your listings on a Blackberry? No, not on MLS, but who cares about that outdated system anyway? You can surf the web on your Blackberry, so you can go to these websites – you might have heard of them – like REALTOR.COM or your company’s website (where you can get sold data, too) without any special software or security key or whatnot. And your Blackberry has instant messaging software built in – so you can coordinate with your office via IM and be available to your Gen Y buyers who (you guessed it) won’t be leaving you voice mail messages. Oh, and look here! Those newfangled Blackberries come with a camera in them! Time to get rid of the Polaroid, Marge! We can even take photos while we’re eating the donuts on broker-tour and maybe email them off to some of our buyers while we’re at it. Shucks! Makes you wonder how they think up all this stuff.

On the road again this week, I had s funny thought as I walked the hallway toward yet another hotel room. Taking a left out of the elevator, I encountered the ever-present hotel vending machines humming away. Thinking that maybe a candy-bar was in order, I reached into my pocket, only to find a Blackberry, credit card and room key. No change, I thought. No candy bar.

Then it struck me; how come vending machines don’t take credit cards? Everywhere else I go, I can simply swipe my card for a coffee, gasoline, even airline ticket check-in. Yet the vending machine still wants nickels and quarters. About half of the machines you encounter say they accept dollar bills; but they usually spit them out in distaste at the wrinkles. How anachronistic, that someone trying to sell candy bars and Coca Cola, mostly on people’s whims, would make it so hard to capture the consumer.

Just like today’s REALTORS.

As I stood there in the hallway, I was amazed at the connection. Are REALTORS like vending machines? Do they make working with consumers as hard as finding “correct change” in a credit-card world. In seconds, the entire analogy unfolded in front of me.

Consider how real estate today often emulates the “vending machine” encounter. Whether it’s a phone call to a broker’s office, a visit to an open house or an online email inquiry, REALTORS continue to make the rules of purchase hard for consumers. Their entire model remains the “here’s what I have, if you want it you have to put your money in first, then press the right sequence of buttons.” Otherwise, no candy – and no change.

The similarities are uncanny:

• REALTORS still only do business in “one currency” – coins and cash – and they don’t easily accept foreign coin. That’s the same as saying they really prefer to get customers by phone, not email, which is why it still takes them hours or days to respond to the Generation Y buyer online. And if you won’t sign an agency agreement or put money down on an offer, like a vending machine, they ignore you even though you’re standing in front of them, staring at the candy through the glass.
• The way REALTORS sell their goods also remains a vending-machine mentality. They only sell what has been “stocked” on their shelves by themselves or their fellow vendors in MLS. Want to look at FSBOs with a REALTOR? They aren’t available on their shelves: no REALTOR website I can find shows FSBOs, HUD, or other available “products” in the marketplace, even though their license lets them help consumers purchase any home.
• Likewise, they usually only sell stale candy and flat soda. You can never find the candy-bar you really want in the REALTOR vending machine. Their websites continue to push the overpriced, under-interesting plain chocolate bars, even though the consumer has been looking for peanuts and caramel for some time now. Vending machines don’t ask you “what you want” they only tell you “what you can get” which is exactly what happens when most REALTORS trap a buyer in their car. Sure, we’ll go see the property you are interested in. Then, I’ll show you all of my listings, which I don’t really care if you’re interested in or not. It’s like pressing the buttons for the Doritos but the plain chips fall out.
• The way most of today’s real estate agents prospect for business is not much different than a vending machine, either. They usually stand around, waiting for customers to find them. Their entire strategy is based upon being “in the right place at the right time,” which, for as any traveler knows, means the vending machine is on the floor up or the floor down. Never are they on the floor you’re on. Just like REALTORS. They sit around the office on “floor duty” hoping the right customer with exact change desiring their D-4 stale potato chips will magically call them on the telephone. You don’t see vending machines with motion sensors reacting to people passing by with a polite, “Wouldn’t you like a nice candy bar right about now?” And you don’t see REALTORS interacting with visitors at their open houses, either. they simply stand around and hum.
• Perhaps the ultimate similarity between REALTORS and vending machines is what happens when things get stuck. Sometimes when you pick a bag of chips in a vending machine, it gets wedged on the way down. You can try to rock the machine or bang the glass, but vending machines are essentially immovable and unrelenting. And there’s never anyone around with a key to help you get your prize or refund your money. You simply stand there, realizing you’ve wasted your time and money and you can’t get to what you want. You simply walk away.

If that doesn’t sound like most of the experiences consumers encounter with REALTORS these days, then you’re really not looking. It’s the primary reason most consumers walk away from agents. They encounter a difficulty – the agent doesn’t have the right inventory on the shelf or won’t find it for them, the agent won’t respond to their emails but only accepts phone calls, and there’s never a manager around to unlock the case and release the goodies when things get stuck.

Needless to say, after staring at the vending machine and seeing the faces of so many agents I’ve taught over the past twenty years, I slowly turned away and headed to my room. There it was: the heart of the REALTOR dilemma humming loudly in the hallway of my hotel. I’d seen vending machines like it, in many hallways of many hotels in many cities for nearly two decades. Many times I had walked away from satisfying my sweet tooth because I couldn’t comply with the stolid, unyielding demands of the machine. And a weird feeling crossed my mind: I actually felt sad for the machine. Sure, I wasn’t getting a candy bar or soda.

But the real tragedy was that the vending machine wasn’t getting my money.

What if there were three little things every real estate manager could do to change the “slow” market? Rather than accept that housing sales are down because of “the economy” or “stingy lenders” or Martians, maybe a few simple steps might make a world of difference – or at least a neighborhood of difference.

The first thing Managers could do is start wiretapping their office phones. You don’t need a government warrant to pick up the extension in the other room and listen in to the kinds of conversations going on between your company and consumers. More sophisticated offices may even have a phone system that records call traffic – which would make this idea even better, because you could play the calls back to your staff and agents. What do you think you’d find if you started listening in on the calls to your office? If you’re honest, here’s what you’ve just answered:
<!–[endif]–>

• <!–[if !supportLists]–>My agents aren’t asking consumers for their names, phone numbers and email addresses.
• <!–[if !supportLists]–>My staff speak too fast and sound too disinterested in the call when they answer the phone.
• <!–[if !supportLists]–>Nobody knows how to transfer a caller to an agent’s cell phone or conference the two lines together.

We find these three issues every day when we “test” the services of different brokerages worldwide. You can deny it all you want, but agents are their own worst enemy. They “answer” consumer calls with “information” but they don’t really do anything to qualify the consumer, engage in conversation or build rapport with them on the phone. If a caller wants to know if “45 Osgood Street” is available, the answer is “Yes” and only half the time it’s followed up by “When would you like to see it?” If the caller says they don’t really want to see the property, most agents (three out of four times) just pull the rip cord and abandon the call with a “Ok, call us back if you’d like to see it,” rather than moving into the qualify-the-consumer-get-to-know-them-build-rapport stage. Agents are still sitting around waiting for the “perfect” call, not the “work hard and turn me into a customer” call.

As for the two other phone issues, managers must really not care about these issues because they have persisted for – oh, let’s say – twenty years that we’ve been testing phone responses. Want to decrease the chances you’ll get customers excited about working with you? Keep answering the phone like you are – and keep losing calls by transferring consumers to voice mail rather than directly to an agent’s cell phone.

The second thing Managers could do to step up the sales volume is to stop putting the wrong products on the shelf. That means, stop accepting the overpriced, under-motivated listing agreements your agents keep bringing back to the office. Look, you created this problem, Managers, by saying, “Don’t come back to the office without the listing!” so you’re the only person who can solve it. Most agents don’t think for themselves and simply do whatever they are told, by whoever tells them to do it. (Proof: they keep running useless newspaper ads because the seller tells them to do it). Simply change what you’re telling agents and you can fix a lot of the market problems. Does your market already have 12 months of residential single-family housing unit inventory? Then start telling agents to bring in some optional units – condos or land (since building costs are low these days). Are your listings priced 20% above the absorption rate of the last ten sales of similar property type? Then cancel the listing agreements and tell your agents to focus on bringing the buyer instead. Getting 50% co-broke fee on someone else’s overpriced listing is a better net profit if you’re not carrying the advertising costs for months. In fact, if you really want to improve the market, forget about listings entirely and just focus on getting your buyers making as many offers as possible until the sellers in the area get the message: the buyer sets the price. So, change the agent’s marching orders, stop accepting overpriced listings, stop carrying the advertising load or just stop listing altogether. There’s always another sucker broker who will take the overpriced listing: and you can pick off the buyer side co-brokes at a better bottom line on the same units. Duh!

The third thing real estate Managers could do today – and probably all day – to jump start the market is start firing poorly performing agents. Why is it that every other industry in the known universe fires incompetent workers? Think like Darth Vader and start getting rid of every Admiral who can’t find Chewbacca. Apology accepted, Admiral Incompetent. Somebody remove the body. It’s about time the real estate management community start acting like managers. You hired sales people, didn’t you? So when they don’t make sales, or do the activities necessary to make a sale, take them to lunch, Donald Trump style. So what if they’ll take their listings with them – let another broker carry that ridiculously unmarketable inventory for a while. Stop coddling the incompetent. Either they don’t fit your company culture (i.e., we follow up on leads around here) or they don’t belong in real estate at all. Either way, keeping underperformers around only discourages higher performing agents. Why should they try harder when you don’t care if someone hangs around the office and goof off? And heaven help your customers who get stuck with one of them. Why is it that we bend over backwards to recruit these guys, then we tie ourselves up in knots when it’s obvious we need to take them out back and have a little conversation, Soprano-style?

Each of these three simple steps requires virtually no training for a Manager to perform. Even partial performance in these areas would be a step in the right direction. It’s absurd that an industry with ample product supply and affordable finance (45 year lows on mortgages) can’t make more sales. The only acceptable reason is that nobody is selling. We’re sitting around waiting – staff answering phones uninterestedly, agents waiting for the perfect deal to call, managers waiting for a miracle to motivate their agents – when what we really need to do is manage the business. Literally.

After recently taking REALTORS to task for advocating more “government backed mortgages” and looser credit limits as the way out for the real estate industry crisis, I thought perhaps I was too harsh on the industry. It’s possible that most REALTORS don’t realize that every time they argue for the government to subsidize un-credit-worthy taxpayers that they are really arguing that the government steal money from the existing homeowners – through taxation to bail out Fannie and Freddie everu so often. Maybe most REALTORS were just too shortsighted to understand that every increase in taxation hurts their future source of business – the future seller who becomes the future buyer. And since most REALTORS only last about 18 months in this business anyway, maybe most REALTORS really don’t care about this stuff, since they are only focused on where they can get a commission in the next 45 days.

Then, something frightening was quoted in the Wall Street Journal on Friday, May 9th, page A3 and I realized that the REALTORS have made the ultimate deal with the devil. In an article by Ruth Simon and Nick Timiraos entitled “Mortgage Firms Cool to Principal-Cut Plan,” no REALTORS are mentioned. There is a proposal by the U.S. House of Representatives that was passed this week that calls for:

…mortgage companies to reduce the principal on troubled loans. In exchange, the Federal Housing administration would pay off the current loan and issue the borrower a new FHA-backed mortgage.

As one might expect, the lenders aren’t too excited about this proposal. Essentially, the government is trying to lure them with a discounted bailout. They would lower the “principal” on the loans that are struggling – which means discount the value of their assets – and the government would give them a quick buy-out. The deal is: they get paid off and no longer risk the potential of foreclosures or defaults. Apparently, legislators don’t recognize how mortgage companies make money. They don’t make it on exchanging principal. They earn a living on interest income. Lowering the principal – in exchange for not taking the risk of foreclosure – it a double whammy. They not only lose money they have already lent, but they lose the option to earn any potential profit on the lending.

Mortgage companies are in the risk business – because the risk is where the interest-payments come from. Offering them only a principal-buyout – at a discount – is essentially asking them to take an immediate loss. It’s a loss, because they already loaned the full principal – and will only be paid a partial amount of it back.

It’s no wonder that the Chairman-elect of the Mortgage Bankers Association said that “he sees no rush by mortgage lenders to write down loans” under such a scheme. Especially since the government is expecting a 15% discount on the home’s current appraised value. No sane businessman could take such an offer. Only the bizarre math of a government bureaucrat could think such a scheme acceptable.

But it gets worse, which is where the REALTORS should be very, very scared. Remember, no louder voice than the National Association of Realtor’s incoming president-elect has been excoriating lenders as “stingy” and the source of the housing market’s woes. And REALTORS far and wide have been promoting more FHA-backed lending (on the backs of the taxpayers) as the solution, even if the method involves robbing lenders of 15% of their assets.

The danger comes – publicly and loudly – from the mouth of the Devil’s Advocate himself: Massachusetts Democrat Rep. Barney Frank. When faced with the potential that mortgage bankers might not voluntarily line up for the government “stick up” plan, he said:

“I want to put the servicers on notice. If we see a widespread refusal on the part of servicers to cooperate voluntarily in what we see an an important economic problem… they can expect much tougher regulation in the future.”

Essentially, what Congress is saying is: Give us your money, or we’ll shoot.

Since all lenders are evil, by nature and in the eyes of government, who should care if we engage in a little highway robbery? If they won’t abrogate their own contracts with consumers, we’ll do it for them. If they won’t stand by while we willingly gore their bottom lines, we’ll make sure we get them in the next round by regulating them more harshly. Do what we say, or you’re going to get it big time later, mister!

Let’s not forget that every brash stick-up man has a little side-kick. In this case, that’s the REALTORS. Remember, those evil lenders are holding up the recovery because they are “stingy” with their lending and won’t have “compassion” for borrowers in trouble by voluntarily losing money for them. Yeah, yeah, give it to him boss; you can almost hear the snivelling sidekicks egging on the bullies.

Ironically, the REALTORS are defeating themselves. If they want lenders to lend more, the last thing they should be doing is advocating a government-led destruction of their business. Who will be left to lend to anyone, after the industry takes another 15% hit on their assets? When interests rates soar, because the risk of lending will become riskier, nobody should be surprised. If the government can come into any industry and just decide to cancel all of their contracts “or else face tougher regulation in the future,” then less companies will stay in the lending business. If REALTORS think lending is stingy today, just wait how credit tightens after the government raids the mortgage industry.

Ironically, this isn’t news. In fact, while reading the Wall Street Journal article, I was reminded of a passage from Ayn Rand’s Atlas Shrugged, where businesses across the country started closing down and walking away because government regulators had essentially stolen every profit and asset they had through “tougher regulations.” Worried that the economy was about to collapse, government regulators (Rand calls them “looters”) got together in a secret meeting and came up with “Directive 10-289.” The Seven Points of Directive 10-289 attempted to harnass industry to the welfare of the people – the essential point of Atlas Shrugged. Two of the points, it seems, could have been written by Barney Frank himself:

In the name of the general welfare to protect the people’s security, to achieve full equality and total stability, it is decreed for the duration of the national emergency that….

…. Point Two: All industrial, commercial, manufacturing, and business establishments of any nature whatsoever shall henceforth remain in operation, and the owners of such establishments shall not quit, nor leave, nor retire, nor close, sell or transfer their business, under penalty of the nationalization of their establishment and of any or all their property….

… Point Seven: All wages, prices, salaries, dividends, profits, interest rates and forms of income of any nature whatsoever, shall be frozen at their present figures, as of the date of this directive. (But taxes will be allowed to increase as needed for the public good)…

Frightening how reality mirrors philosophy? Note how Directive 10-289’s Point Two mandates that business owners can’t “quit, leave or retire” under penalty of nationalization. Isn’t that what Mr Frank’s “tougher regulations” will ultimately add up to? Point Seven freezes all “profits and interest rates” which we’ve heard suggested by Presidential candidates who want to have mortgage moratoriums to solve the crisis. What is a 15% discounted forced sale of assets if not a “frozen” form of income?

REALTORS may not realize that while the lenders are in the sights of the regulators today, they could just as easily become their next targets in the future. Every attack they sanction by government or scheme to transfer lending risks on to the taxpayer only erodes the possibility of a healty real estate industry in the future. When the Devil comes around for payment, REALTORS might find that they are next in line for a “government mandated discount” – on their commissions. How hard would it be for government regulators to argue that buyers and sellers are being stifled by high commissions? Wouldn’t it be the next step for government to expect all REALTORS to discount their commissions by 15% – maybe more?

Why is it never the REALTORS’ fault when they can’t sell homes? After about a decade of feasting off of the housing bubble, one created largely through loose money and easy credit, REALTORS today are “struggling” to put deals together. Is it just that the housing bubble collapsed like the literal house of cards it was? Maybe that’s why today’s real estate leaders are complaining that it’s not their fault the recovery is stalled.

It’s all because of those “stingy” lenders. Somehow the REALTORS didn’t get the memo explaining that the reason the housing bubble popped was due to “over-generous” lending to buyers in the first place. The air was let out of the balloon because “un-stingy” lenders created an equity gap that couldn’t sustain a movement of only 1 percent on the average (adjustable) loan. Yet the “solution” – according to the REALTORS – is to forget all of the lessons learned and throw good money after the bad. Haven’t we been to this party before? Wasn’t it junk bonds, then subprime lending? Maybe the REALTORS just want to cut out the middle man and give the money out directly to buyers – through the “new finance miracle” of higher government backed mortgages. Then the market will return to “normal.”

Talk about wanting to have your cake and eat it too!

Everyone should be scared when they hear leaders (industry and political) saying things like:

A rebound in the housing market is being held back by stingy lending standards, the president-elect of the National Association of Realtors said Thursday. Irving real estate agent Charles McMillan – who takes over as head of the 1.3 million-member Realtors association later this year – faults mortgage companies for keeping some potential homebuyers out of the market.

This quote was from the May 8th Dallas News website and it reminds us of a certain kind of fuzzy math from some years ago. McMillan continued:

“What they have done is raise fees and make qualifications almost impossible for people to get loans,” he said. In particular, Mr. McMillan criticized the high costs of so-called jumbo loans – mortgages of $417,000 and more – that are chilling buyer demand in many markets. Interest rates on such mortgages now are much higher than those on smaller loans. And Mr. McMillan said that in some depressed housing markets lenders are raising costs even higher to homebuyers and making it tougher for them to qualify for loans. “That stigmatizes properties unfairly,” he said.

McMillan may be forgiven for using hyperbole in claiming that it’s almost impossible for people to get loans, since qualified buyers are buying homes just fine these days, and many at a fine discounted sales price. The association he will take the helm of, the National Association of REALTORS, said today that housing sales gained 12.5% in the Northeast, a sector particularly hard hit in the overall downturn, although other areas were still declining. Yet the leader of the real estate industry can’t possibly be arguing that lenders are wrong for “making it tougher for [buyers] to qualify for loans,” considering the errors of their former ways, can he? Does the National Association of REALTORS simply expect lenders to write-down billions and simply start doing it all over again?

Of course lenders are going to tighten standards and requirements. Not the least of which, they’re going to start verifying income and requiring substantial down payments – the tenets of sound lending practices that REALTORS should vigorously support as the foundation of homeownership. Anyone remember “building equity” as the reason for buying a home? But perhaps the real problem isn’t that McMillan and other are worried about tighter standards. The real issue can be found in his own statement: What REALTORS want is for lenders to more freely lend on jumbo mortgages. And the only reason to do that is to induce housing prices to rise again.

The REALTORS want to relaunch the housing bubble, back into the stratosphere.

Arguably, refloating the bubble is in the REALTORS’ best interests: it will help sell the homes of sellers who are upside-down in their equity stance by recreating artificial home prices (due to inflated lending). An uptick in pricing should induce buyers come off the “wait and see” sidelines, too. And let’s not forget that REALTORS – who are paid on commission – will make more money if house prices rise. None of which should we begrudge the REALTORS: it’s their business and they have mortgages to pay, too.

The trouble is, the lenders aren’t going to play along this time. They lost too much money in the last round to let price inflation take off again – especially in a fickle commodity like housing. Houses aren’t supposed to be “traded” by buyers and sellers – not, at least by the people who purchase them almost entirely on “margin” (that’s what a subprime buyer with no money down really is). Lenders are going to be very skeptical about appraisals, too – especially those adjusted for “market prices” that are derived from REALTOR MLS SYSTEMS. This isn’t to say that appraisers and the REALTORS “caused” lenders to get fast and loose by publishing crazy MLS data. The lenders willingly played along. However, the lender hangover is going to last much longer than REALTORS desire – especially as tighter standards hold up their next commission check.

The scariest part, though, is that REALTORS are actually hurting their professional image by playing the blame game. Plenty of homes are selling and plenty of buyers are buying. It’s up to the REALTORS to price homes properly and find qualified buyers. It is not up to lenders to turn marginal buyers into easy deals for REALTORS. It’s also disingenuous to all of the qualified buyers – especially those who purchased with a REALTORS’ help during the same period who did put down 20% – to argue for looser standards on higher loan limits (read: higher risk loans). Many buyers didn’t over-extend themselves by borrowing beyond their means and REALTORS should be careful to advocate that overextension is the solution to market woes.

Looser standards on government backed loans are just another reconfiguration of a housing disaster – one that continues to hurt the sound buyers and owners. What hurts housing prices isn’t lack of affordability – it’s a foreclosure on the same street as a buyer with 20% equity in his house who now can’t sell because this “market price” is driven down by a fire-sale next door.

Who do REALTORS think subsidize the cheaper standards for jumbo mortgages? Higher lending to marginal buyers causes rates to rise – for everyone. Government backed loans are bad for current owners because they increase the risk of failed borrowers in their own neighborhoods: That’s what brings down market price – not lack of buyers, but “failed” buyers whose homes go on “wholesale” and depress the neighborhood value. And let’s be honest: risky buyers with no-money down are financed by good buyers with only 10% down who have to pay for “insurance” that really spreads the risk caused by risky buyers in the first place.

There is no free lunch, not even for REALTORS. The “good” buyers who became today’s “good” owners are the ones who will finance the relaxed standards that REALTORS want to fuel their new housing balloon. Current homeowners will face higher costs to tap their equity (like for college tuitions), credit options lessened – because someone has to pay for lending to marginal buyers. And since the chickens always come home to roost, these homeowners will remember who was pushing for looser lending when it comes time to decide whether – or not – to hire a REALTOR to sell their home again in the future.

After another week on the road teaching some sessions and having lots of fun with my students, I’m happy to report that there seems to be a consensus amongst the (remaining) real estate professionals in the country: The Basics are Back.

You know, things like prospecting, following up on visitors to your open house, being organized, calling customers back, even reasonably pricing properties (Ok, that one really isn’t back but we can pretend it is…). Sales, my friends. Good old fashioned sales. That’s what everyone is “suddenly discovering” is missing in the business.

It’s no surprise: not to those of us who’ve been around a bit. Remember, according to the research, 60% of agents leave the business within 18 months; and 90% of the agent population turns over every 5 years or so. Now, if you do the math, that means that a significant proportion of today’s real estate agents (and managers) have been in the business for under 5 years. And many joined the business when it was HOT. So they’ve never “had” to sell before. Nope – no need to prospect or give the courtesy of a follow up to anyone when you can stand in front of a listing and get multiple bids on your listing within hours. An entire generation of agents “grew up” during the boom, where the only criteria for success were a pulse, a license and an offer form. Ok, maybe an agency disclosure somewhere and possibly a sticky-note with the dates of closings on it. But certainly not sales skills. Who needed to sell when the properties sold themselves?

Ah, the chickens. They always seem to come home to roost. And any farmer – and nowadays, REALTOR – will tell you: the one place you don’t want to be standing us just under the roost when the chickens return. Yup.

So that’s why the “basics” are back. Sales. Prospecting. Stamina. Patience. Benchmarking and measuring. Tracking advertising. Accountability.

Unfortunately, it all sounds good; but a closer look makes me worry. That’s because, believe it or not, the “wrong” basics are back.

Here’s what I mean: REALTORS are sending POSTCARDS again. Sending out mailings with their photo on them. Oh, goody. Just what we need – more high-school photos in our mailboxes.

And it’s not just “mailings”. They’re re-doing their websites. Not with new features – like blogs or podcasts or even video. Nope: They’re re-designing their bullet points, their personal credentials, their awards from production levels that were unrealistic to begin with three years ago – and have nothing to do with their ability to sell anything today.

And, since basics are back, they’re doing listing presentations again. No more sweeping into a home and saying, “pick any price and we’ll probably get 20% over it anyway…” They’re looking at MLS data – but they’re printing it out.

Personal Photo Mailings. Classified ads. Braggard websites. MLS printouts. Just about the only thing that’s missing from the list is, oh, let’s see: faxing?

The point, of course, is that while the basics of “sales” are back – not that they ever really left – the “methods” of sales have come a long way. At least far beyond postcard mailings and newspaper ads. And listing presentations on printouts. And checking voice mail because the agent still hasn’t bought a Blackberry. In other words, too many agents are returning to the basic methods of how real estate was sold 10 years ago (or more) that are not only ineffective, but so costly, they are certain not to survive this market downturn.

I don’t need to list the things that should be done instead. Most agents actually “know” what they are; they just can’t do them because they squandered the last five years when they had the money they could have invested in them (and the training to do them). All they have left are tired old techniques of so-called marketing, so-silly advertising and so-ineffective relationship building that they should just call it quits.

They aren’t getting calls because nobody reads their postcards; and nobody calls any more. They send emails – which the agents can’t see because they don’t have a Blackberry. They aren’t getting listings because they can’t make 30-something-sellers believe they are professional when they use photocopies in their presentations (especially when the sellers use a laptop themselves every day at their jobs). And they aren’t selling homes because not only don’t they know how to price them, they can’t possibly believe anyone reading a classified ad will really know that a “3 BR, 2 BA w/LGFMRM” is their dream home.

The basics may be back. I don’t think they ever went away. What should have gone, however, are these tired, silly, outmoded ways of selling that never worked back then, either. How scary that they are suddenly back.

Why do REALTORS think that the solution to sluggish sales of their listings is simply to put them on more websites online? Recently, a barrage of offers for REALTORS have found their way into my inbox, each promising to distribute my listings to more sites, more feeds, more portals than the other guys. The reasoning goes like this: Hey, REALTORS! The reason your listings aren’t selling is because there aren’t enough buyers seeing them. Or the “right people” aren’t seeing them. Or someone online isn’t seeing them. And the solution is to spread them around – feeds, blasts, blogs, blurbs, ads and spam – until everyone, everywhere knows you have another listing they might want.

Oh, sorry: did I say “might want”? That’s the catch, huh? Maybe the real reason listings aren’t selling online is not that they’re not on more websites but something much simpler:

Nobody wants them.

Duh! Could it be that the reason a commodity might not be selling in the market right now is, well, um, er, nobody wants it? No, no, no, no! That can’t be it! We just haven’t found the right buyer! We haven’t put it in front of enough people. It’s my MLS’s fault or my broker’s website sucks. Nobody visits REALTOR.COM or looks up my listing! It has to be that! Quick, run a newspaper ad!!!!!

Slap! Ok, snap out of it. Let’s try this again: Plenty of people are seeing your listings today. If they’re on REALTOR.COM, Google, Trulia and Zillow, plus a major brokerage website, that’s really about it. A few more eyeballs from Craigslist or some obscure classified site or blog isn’t going to make a bit of difference. Why? Simple: because nobody’s looking there! If they were, those sites would be as big as REALTOR.COM or Yahoo Real Estate. But they’re not. So the answer to the listing-isn’t-selling dilemma obviously isn’t more website distribution.

Now, back to the real argument: The reason nobody’s buying your commodity is because it’s unattractive. No, I don’t mean the ugly rug in the living room, although that has to definitely go. I mean it’s not a valuable commodity. More likely, it doesn’t contain the features people are looking for (notice the number of large new-construction properties sitting on the market, while condos are being snapped up by retiring Baby Boomers like crazy). Maybe – and here’s just a guess – it’s overpriced? If you’re using MLS data to price it, then you’re definitley toast: Pricing your listing to be “competitive” with other “overpriced listings” just adds more overpriced listings to the inventory that nobody wants.

Hmmm… maybe the listing information is poorly written – no staging, just blurb after blurb of features: nothing to make me “want” it, like a BMW ad makes me “need” a new one. More likely there are few pictures – except for the really cool ones, like the moldy shower curtains and curbside shot half-hidden by an oak tree and bus sign. Throw in a few “BR” and “BA” descriptors and you’re wondering why you’re not reeling in more customers? Well, even a fish won’t bite a rotten worm on a rusty hook.

Of course, none of these could be the reason, could they? I don’t know: Check your hits. If a few dozen people are checking out your listing a week (or day) and nobody’s inquiring, could it be that all the buyers are wrong? Just jerks, right? Couldn’t possibly be that the consumer has judged your product inferior – to their desires, or at the least, their desire to overpay for it?

Nah.

More website… that’s it… more sites, more data, more spreading. That’s going to solve everything….

Here’s a radical idea to help real estate companies convert more prospects into deals. Like most of our ideas, real estate agents will probably hate it. Which means consumers are going to love it.

Stop giving agents leads because they are “qualified” to work in a certain area, property type or price range. Instead, only give leads to agents whose past performance indicates they are really qualified to work with consumers.

Ok, stop shrieking. Take a breath. Think this out with me…

There is only one form of qualification that matters in business. Did the consumer actually buy from you? That’s it. If consumers are paying you, that means you’re generating value for them. And that’s the only rational and measurable metric of “qualification” in business.

If you sell a product – like a computer or a cell phone – your “qualification” to be a market leader or a top company is directly determined by the number of consumers who buy your computer or cell phone. If you sell insurance, then your “qualification” to work with consumers is measured by the number of consumers who subscribe to your policies. In sales – which ultimately all for-profit businesses are in sales – the only measurement of performance is, well, performance!

Now, back to real estate leads. Today, most companies generate leads. They do this through advertising in print, mail, television, radio and web. These leads arrive as consumers who walk into the office, call by phone or send an email. The leads cost a lot of money. Yet the vast majority of them fail to “buy” our products and services – even though they eventually buy those services from another company. It’s not that the consumer isn’t buying a real estate service; it’s that most companies fail to convert the consumers into deals a greater proportion of the time.

And it’s the case offline and online. Offline, telephone calls and property showings have a huge failure rate to create paying customers. Open houses are the premier example. Virtually no sales activity is conducted at an open house (it should be called “house sitting” in most cases) and the vast majority of visitors to an open house do not purchase the house they visited – or any other house from the agent whom they met there. In other words, the agent failed to convert the consumer into a customer (of that house or any house).

Online, it’s almost worse. Comical but scary. Most brokers give their company-generated leads to agents who are “qualified” based upon non-performance standards. For example, if a consumer sends an email to a broker requesting help purchasing a home in “Andover” the broker usually finds an agent who is “qualified” to sell in Andover because, simply put, their “territory” on a piece of paper includes Andover. The broker rarely asks, Who has sold the most homes for us in Andover last month/year? Instead, the qualification is simply that a couple of agents work Andover while another few work Methuen territories.

The same is true for other “criteria” like property type or price. if a consumer is interested in a luxury property, the broker matches them up with someone who has taken a “luxury property course” not necessarily the agent who has sold the most number of luxury homes in the last year. Some agent says they “work with renters” and we direct renter leads to them. Another agent says they are “qualified” to work with land, and we zip land-requests to them. Quick, write down all of your qualifications so you can get those leads! The result is that everyone is qualified for everything, so we’re back to “round robin” lead distribution.

And of course, nobody’s converting anything into sales.

If brokers wanted to convert more leads – and provide better services to consumers, who, in turn, would pay more (or more frequently) for the services – then they need to improve their qualification and matching systems. Performance is what matters, not “certifications” or skill lists. How many “E” certified agents have listings online without a photo? How many “relocation” trained agents can’t close on those consumers? If you want to measure an agent’s qualification to work with a consumer, then base it on their actual past performance.

Look at it another way: when you go to the hospital for an appendectomy, do you want the surgeon who is “qualified” to do the surgery because it’s on their general resume (even though they haven’t done one in years) or the guy who does ten appendectomies a week and every patient goes home fine? Do you want the mechanic who can “purchase” a sign that says he works on Mercedes cars, or the mechanic who repairs ten cars a week reliably and consistently? Do consumers want “qualified” or “performance”?

While it’s important to know that an agent has been “trained” to work with certain property types or has knowledge of certain market areas, once you have more than one agent with the same basic profiles, you have to find the next metric of performance. And that is sales. If two agents work with buyers of colonial homes in Andover, which one sold a greater percentage of his leads last year (not volume, but percentage)? Even more importantly, which sold them at a greater overall profit margin (less time on market, lower advertising cost, higher list-to-sell ratio, etc)?

Leads are too expensive and too important to simply hand out to “anyone.” Brokers are converting a paltry percentage of their potential business – maybe 2 or 3% of online leads, and only slightly more of walk-ins and calls. Agents throw away most leads handed to them: years of evidence indicate that they simply give up after a few calls because “the consumer doesn’t call them back.” Most agents don’t have the skill or stamina to work a real lead – although they are “qualified” to work in an area or price range. As usual, we’ve been qualifying agents to work with a “marketplace” rather than qualifying them to work with “people.” Leads are people; houses don’t call to sell themselves. But most agents are more qualified to talk about the house than talk to the people.

If you want to radically improve your business conversions, try these radical leads management ideas:

1. Only assign leads to agents who actually convert them. Pick a start date and set everyone at “zero.” Then look back at the last six months of performance in critical metrics: market area, property type, days on market, net profit per deal are all good starting points. Then rank all of your agents according to these business criteria. Forget about towns and certifications: A good salesperson can brief themselves on a town’s features and benefits before talking to a buyer, even if they have never sold a home in that town before. Now match incoming leads to those people whose performance record warrants it. Send more leads to the top performers, and a few “tester” leads to the lower performers (so everyone gets some leads but not evenly because you can’t afford it).
2. Start measuring the next six months of conversions. This gives the lower performers a chance to improve their scores by converting greater percentages of leads provided to them, at better profit margins. As they do better with more leads you provide them, their “record” will improve and they will be “qualified” to get a greater percentage of new leads. Those who can’t perform will receive fewer leads, and if you’re honest, you’ll fire them.
3. After six months, start incorporating consumer feedback as the highest level of qualification. While we certainly want to give leads to agents who can close deals, if they can’t create customer service experiences that send referrals or repeat business, then they are “good” but not “great.” Remember that the vast majority of business in real estate is referral generated. So that’s a critical metric of performance. Start surveying every consumer from every closed deal. Rank important feedback related to their experience. Collect and average that information into each agent’s performance profile. Many other companies do this (see Guru.com, where service providers can sell their services online but their customers can “rank” them online which helps new customers evaluate them for new projects) and it’s the best way to ensure that customers are both paying and valuing your service.

If you do this, here’s what you’ll get. Happier customers. More paying customers, Attrition of non-performing agents. And more profit. You’ll be converting more leads because you’ll be assigning them to people with track records of converting leads, not working in an “area.” Performance matters; and that’s how you should assign new business.

It’s possible that after time, you’ll end up with a few of agents with high conversion rankings and good consumer feedback. So you might have to return to a “round robin” distribution of leads amongst these top performers. All of your non-performing agents will have left (or been fired) so you’ll have the “unfortunate” problem of evenly distributing business to a few agents who will be converting a high percentage of it.

What a nice problem to have!

How do you know when an industry is dying?

Simply look for the Luddites.

As in the 19th century, when technophobes sought to smash the emerging factories who were “taking their jobs, the the spectacle we have seen in the past few years across the REALTOR community is not much different, as it tries to use MLS rules to smash challengers to its Old Ways. That’s the only way to explain why the U.S. Department of Justice announced it was suing the Consolidated MLS of South Carolina for restraint of trade.

Regular readers of my columns know that I’m no fan of government interference in the economy. The free market is the best regulator of freely competing companies. Consumers, through free market mechanisms (choosing to purchase services or not) are quite capable of protecting themselves. And in cases of fraud, there are plenty of legal remedies that don’t require Uncle Sam’s preemptive strike. But in the case of the REALTOR Luddites versus the Industrialists, I’ve got to say: The DOJ has it right for a change.

The DOJ’s lawsuit is correct because the purpose of government is to protect one’s rights from harm from others. Consolidated MLS’s attempt to create artificial barriers to working with all consumers was exactly that: harming some people’s right to make a living (their right to life, exactly). Let’s look at the case.

The DOJ claims that Consolidated MLS was trying to impose “minimum standards rules” on their members. Essentially, the MLS was attempting to set a standard of performance for all members to practice “the same way” (at least same way minimally). The rules would impose subjective whims that abrogated the rights of some members to do business the way they see fit. And the only purpose of imposing these rules was to restrain the practice of some other members.

Essentially: One rival gang got control of the system and was using the rules to beat up on another gang. The “full (or more) service” brokers were preventing “less” or discount service brokers from participating in the marketplace.

According to the DOJ:

By providing an efficient means of exchanging information on home listings, MLSs can benefit consumers, but that same role makes access to the MLS database – and therefore MLS membership – critically important for any broker seeking to serve clients efficiently in the MLS’s service area, the Department said. Consequently, the rules adopted by CMLS governing who can be a member and how members must run their businesses have a significant impact on competition among brokers in the area served by the MLS.

http://www.usdoj.gov/opa/pr/2008/May/08_at_373.html

Al Capone would have been proud.

In his day, it would have been cleaner. Want to take out the competition? Use a Tommy Gun or just burn down his headquarters. Today, it’s much more subtle; cloaked in double-speak and the veil of “consumer protection,” the REALTORS actually believe themselves when they said they were doing it “to protect consumers.”

The DOJ continues:

In its court filing, the Department said that the rules that real estate brokers in Columbia have adopted through CMLS unreasonably restrict competition among brokers in the area. For example, unlike brokers elsewhere in the country, CMLS members are prevented from offering home sellers the opportunity to avoid paying a broker’s commission if the seller locates a buyer on his or her own. CMLS rules also require brokers to perform a prescribed set of services [emphasis added] – such as being involved in the negotiation of a home’s sale price and attending the closing – even if the broker’s customer would prefer to perform some of these tasks on his or her own in order to save money on the real estate broker’s fee [emphasis added].

The Department said that CMLS’s rules also give Columbia real estate brokers the ability to exclude rivals from outside Columbia who might offer local consumers innovative brokerage options that save them money or provide services that better match their needs [emphasis added]. The Department’s lawsuit challenges these and other CMLS rules that unreasonably restrain competition among real estate brokers and thereby lead to reduced consumer choice and higher fees paid by consumers.

So, why should the DOJ get involved?

First, if it didn’t, it would be sanctioning the formation of a price-distorting cartel. And while the government doesn’t mind when it sets up these cartels itself (see the Old Airlines or the Old Telephone System or the Current Cable Television Market), it won’t stand for it when some other gang tries to do it on its own.

Second, CMLS is clearly trying to create a “regulation” of the marketplace outside of the legislative process. This is because the “rules” of CMLS don’t just affect their members (like, everyone who attends the club must wear a tie) but the brokers outside of the club are affected without recourse. The CMLS rules would permit it to exclude certain rivals from access to the marketplace. And while restricting membership to a private organization like MLS isn’t per-se a problem, doing so to prevent competition (essentially on price) is a problem.

Side note: let’s dispel the little lie that the DOJ is really trying to protect the consumer, though, shall we? The DOJ certainly doesn’t have a record of wanting to “help” consumers. It sued Microsoft for giving away software for free.

No, the DOJ is correct – and only correct – in this case because it’s job is to protect the right of “non CMLS brokers” to make a living within the legal environment setup by the duly elected legislators of the state and Federal governments. Minimum standards would be a form of illegal regulation of real estate licensees by a non-governmental trade association.

Note that if some or all of the Brokers of CMLS wanted to only offer “full service” brokerage, there’s nothing to stop them – other than the consumer, that is. But the license law – which is the only standard of being a sanctioned real estate broker in South Carolina – doesn’t mandate “full” service or “discount” service or “any” service other than following the law. After that: the sky’s the limit in how licensees apply that law through business models.

That’s the government’s job: to prevent extra-legal cartels from skewing the marketplace through “rules” that are outside the legal boundaries set by legislators. If a broker has followed the law in becoming licensed and in setting up a legal business practice, he should otherwise be allowed to engage consumers unfettered by outside interference. Competition is not interference. But any “non legal” rules that prevent him from working with consumers or other business entities in the market is interference.

It’s not that the “non CMLS” brokers wouldn’t be able to compete in the marketplace, even if CMLS rules were allowed to stand. It’s that the CMLS brokers wouldn’t engage the non-CMLS brokers in the cooperative selling and buying of homes. And that’s a cartel; a form of “boycotting” that’s no worse than OPEC or other price fixing groups that regularly skew the marketplace. Clearly such policies harm consumers (once they figured it out, they’d probably be unhappy with CMLS brokers’ practices, too, considering it would inhibit their ability to have options of brokerage services within the MLS arena). Yet even that’s not the point; Consumers who don’t read the fine print or learn more about who is representing them have only themselves to blame: Caveat Emptor, if you please.

But let’s put aside the finer points of the law, shall we? Do we really need to worry about “who” is harmed by these “minimum standard” rules – consumers or non-CMLS brokers? No, we do not need to worry about harm, if we remember the simple facts of economics: Every time any organization can create artificial “standards” that lock out competitors, it’s always for the purposes of artificially maintaining high prices. Great examples from history and today include the Betamax/VHS war, where Sony tried to lock in more expensive tapes and machines, even though consumers wanted the cheaper, longer recording times of VHS. IBM tried it with their proprietary Microchannel architecture. IBM could price it’s MCA cards at many times higher than standard ISA cards because they controlled the licensing model for peripherals. Once again, minimum “standards” were introduced by IBM ostensibly to benefit the consumer (faster PC bus) but more likely because IBM had been losing control of the hardware business for years. Even Apple seems to be learning this lesson, as French lawmakers challenge it to accept all music standards on the iPod.

Ironically, in all of these cases, casual observers can note the same mistake made over and over: one that it doesn’t take a Department of Justice to fix. Sony forgot to ask the consumer what they wanted. IBM forgot to ask consumers how much they’d be willing to pay – and learned quickly when consumers gobbled up the cheaper EISA models introduced by competitors. Apple finally accepted non DRM music files. And REALTORS, finding themselves at the end of their reign over the Medieval real estate brokerage model. REALTORS, too, have failed to listen to consumers, who ask for alternate models of service because they’re clearly looking for options. If REALTORS were honest, they’d look in the mirror and note that they, too, like options, lower price options for sure (just try to get a REALTOR to buy anything full-price and you know what I mean…)

Consumers are the ultimate “standards of performance.” REALTORS just don’t seem to be able to learn this lesson. For decades, REALTORS were the Sacred Keepers of the Book, whose pages revealed to them the mysterious inventory available in the Overwhelming Marketplace. The Priests of Real Estate would often speak in tongues – babbling incoherently that only an anointed GRI could interpret the information on MLS, so that the consumer wouldn’t end up with PMI if their HUD wasn’t correct. Like feudal lords, they considered the consumer their “charges” and vowed to “protect them” under Exclusive Agency, like some sort of noblesse-oblige. How quaint!

What we’re seeing recently, because Consolidated MLS isn’t the first REALTOR guild to have tried this approach in the last few years – is the end of the REALTOR Mercantlist Era. While they profess their admiration for Mr. Smith, they really prefer the protection of Her Highness, Fannie Mae and His Majesty of Bailouts, Uncle Federal Reserve. It’s a time of revolution for the industry – not industrial, but informational this time – and the Old Guard is still hoping the future will go away. Like the Luddites, some REALTORS will try anything to prevent the transformation. They fear new models of real estate brokerage: they see new models of “partial” brokerage much like General Ludd and his Redressers saw the replacement of “skilled” workers with semi-skilled machine operators. In the Glorious Days, REALTORS needed to know all the spells and incantations; today, the discount-broker can simply click the mouse.

To anyone who has read history, this isn’t a new story. Consider this quote:

In the depressed state of agriculture for the last twelve months, some relief was absolutely necessary. Numbers of persons had been turned out of employment, and the pressure of the poor rates was become intolerable… Most enormous losses had been suffered in the last year; and if some speedy remedy was not administered by the wisdom and firmness of the legislature, the agricultural interest of the country might soon be completely ruined. (Parliamentary Debates, 1st Series, vol.29, (l8l5) Col. 984)

It would be very easy to substitute “real estate” for “agriculture” in that quote – from the Corn Laws debate of 1815 England. The farmers wanted laws to prevent the price of corn from falling further and the “industrialists” from gaining advantage over them by using “machinery.” Sounds remarkably like today, don’t you think? A sagging real estate market, a challenge by new men with new machinery, an attempt to use regulations to prevent competitors from entering the market.

Thankfully, we know how it’s going to end. Eventually, the Luddites disappeared: many actually went to work in the factories they despised. Even they ultimately enjoyed the benefits of a better life, as the cottage spinning wheels gave way to the revolutionary water wheels of change.

Here’s an update to some thoughts posted in the past on “recruiting” and “retention” in real estate. Brokers worldwide spend an incredible amount of time “finding people” to join their company and then going to extremes when others wish to leave it. It’s a constant scurrying-about of energy, time, money and frankly – waste. No other industry, certainly no other worthwhile sales industry, goes through such crazy contortions to grow its business. For decades, “recruiting and retention” topics have attracted packed rooms at conventions; new schemes, gimmicks and tricks have been taught and tried; brokers have done just about every extreme, from offering 100% commissions to creating exit strategies. And, if the numbers prove correct, none of it works.

Every wonder why?

It’s fairly simple. Most recruiting and retention fails today because most brokers build their businesses like Ponzi schemes. Now don’t get me wrong: properly done, multi-level-marketing systems can work. There are great examples like Amway. But real estate should be embarrassed that it’s growth strategy is so fragile – because like the vast majority of MLMs, the evidence shows that the pyramid approach to building a real estate company is a total failure.

Some data: According to NAR, about 60% of all agents leave join and exit the industry within 18 months; 90% of the business turns over completely every 5 years. Less than 10% do 90% of the total volume. And while the top 25% of the industry earns more than $200,000 in commissions annually (and works 60-plus hours a week to do so – the vast majority (55%) earn under $9700 and the bottom 75% would be better off with a minimum-wage job as a pastry chef than continue their “careers” as a REALTOR.

So, no: the recruiting and retention strategy of REALTORS for the last half-century doesn’t work.

Here are a few simple reasons:

Owners are awful recruiters, and even worse managers. First, owners don’t know why they are recruiting. They think like a pyramid scheme: More bodies, doing 1-2 more transactions each, and we’ve got a lot of deals. Nobody adds up the expenses of supporting a larger base at the bottom, or the risks. It’s all about “pack in the bodies” and let the chips fall where they may. So recruiting is simply a “pack the house” not “manage the production” strategy. And that’s why they are worse managers: because they really never manage the people they recruit. Just bring them in, make sure the have a license (or give them one, see below) and tell them to start “selling”. Somehow. Miraculously. Just start selling.

The vast majority of broker-owners in the business today were great salespeople who became brokers and drank the Koolaid: They figured that if they could get a bunch of people working for them, they could pick up a piece of the pie. That works: if you recruit the right people and you manage them to higher productivity. Since 57% of brokers report a financial loss every year, there’s no evidence that the majority of the industry, therefore, knows how to do either.

What evidence is there that owners are bad recruiters? Look at the recruits. Almost none of their recruits are qualified to be salespeople. Sure, they spend time trying to rob a “top” agents from the competition, but that’s almost always a disaster. While those people can “sell” the only way most brokers attract them is to offer a financial compensation plan that’s a disaster for their bottom line. So why do they do it? Nobody really knows; and nobody can ever prove it’s financially profitable to recruit the top agents from another company with a higher split – especially while another company is robbing you of your current top agents. It’s a big shell game. Don’t forget to ask why the “top” agents are willing to be lured away, either: People join companies because of a manager; and they leave because of a manager. Once owners start focusing more on “recruiting more people” than living up to the promises they made when recruiting their existing ones – more training, more support, more coaching, blah, blah, blah – once they start ignoring their current salespeople, then they become ripe to be attracted away. People leave one office for another because the broker fails to manage them. Managing and coaching people is the only way to retain them: Make them productive and build strong relationships and retention is not a problem. Ever. Remember, Southwest pays its people substantially less than other airlines, but they have a line out the door of people who want to join. It’s not about compensation.

Why do managers start ignoring their current salesforce? Partly because the only way to keep afloat – especially after giving away the store in silly compensation plans to top agents – is to find lots of lower-split agents to make up the lost margins. So the manager’s time is spent recruiting lots of “newbies” to offset the “top agents.” The other part is because owners aren’t really managers. The vast majority have never taken a “management” course, don’t have an MBA and have no idea what their real job is. For proof, look at how many owners still “sell” because they “have to” to keep the scheme moving. If you’re selling and recruiting, you’re not managing. And if you’re not managing, most people around you are failing.

In a steel mill or a computer factory, the manager doesn’t “do” the job of his workers; he manages their performance, improving and guiding their skills to higher production. If a manager has to do their job, he can’t have time to work with his people. If he’s constantly interviewing and hiring new people, because his existing people are always leaving, he can’t create performance, because he’s constantly “resetting” the performance levels back to “entry level.” Same holds true for REALTORS.

Yet it gets worse: There is ample evidence to conclude that recruiting is the absolute most destructive activity a broker undertakes in real estate. Worse than 100% commission splits, because we know there are lots of brokers who make that work (see RE/MAX for example). Even newspaper advertising is less damaging than recruiting, because while the ad may represent a waste of money, it doesn’t represent the “addition of incompetence” into the workforce. And that’s what most recruiting involves nowadays.

Look at most real estate agents today and ask yourself one question: Are they qualified to be sales people? Not can they sell a home or put it in MLS or take digital photos. What makes them qualified salespeople? Do they have the skills, talent and experience to build relationships, demonstrate value and negotiate sales? Forget about paperwork: that’s for secretaries. Never mind agency law or Fair Housing – those are just the “particulars” of a product line (every industry has regulations for the salespeople to follow). There’s nothing special about selling homes – if you can sell pharmaceuticals or insurance or cars, you can learn about a product line involving homes. But can you sell?

No shock to find out that most “REALTORS” today aren’t qualified sales people. A rare few were salespeople before they became REALTORS. Most are “recruiting’ from other professions: teachers, firemen, computer guys, construction workers, whatever. None of those jobs require or teach the art of sales. So why do brokers “beg and plead” with these people to join their company? Why do we run pre-license schools? Sure, anyone can learn the law around real estate, but would we want to recruit them as salespeople? The only pre-qualification most people in a pre-license course have is that a) they are alive and b) they have enough money to attend the course. Why would brokers want to “pick” from any of them? John the Cook and Sally the Secretary have no history, skill, demonstrable proof that they can – or will be able to – sell. Sure, they can “say” they want to get into sales, but that’s irrelevant. And please, could we all just shut up about “wanting to help people.” If that’s all that’s needed to be successful in real estate sales, then let’s just hire a bunch of helpful nuns (no offense, nuns).

Brokers damage their companies over and over by bringing in people who don’t know how to sell – and whom they don’t have time to teach to sell, because they’re too busy recruiting and retaining. They actually create non-productivity by employing unqualified people. And they create the retention problem because a) the few qualified sales people they have don’t want to stick around with a bunch of incompetent complaining pseudo-agents and b) they certainly don’t want to coach them on behalf of the manager (that’s their job) and c) the unproductive people consume lots of time (they need more of the manager’s help than the productive salespeople) and money (they still need business cards and advertising) and finally d) that’s why the broker has to start selling again, because nobody’s making enough money to pay the bills.

What a mess!

If you owned a coffee shop, and needed help making coffee for customers, would you hire someone whose past experience was janitorial work or computer programming or roofing? Don’t you think that hiring salespeople should require “previous experience and proven performance” in the act of actually selling? Is this really such a hard concept?

Finding qualified salespeople is simple. Look around; they are everywhere. The local electronics store will have a star salesperson; so will the local car dealership, insurance office, telephone equipment provider, home siding company and computer store. Great sales people are everywhere: they just sell “different” products than homes when you meet them. But if they have a track record of sales (the usual awards and achievements are nice; but just go “experience” them yourself by acting like a potential customer) then you have your target recruit. Stop trying to “turn” a teacher into a real estate sales person; there’s a reason people ended up in their previous jobs: it was a match for their talents. If you want to hire talent, you have to actually interview people with a proven history of using it. In real estate, that talent isn’t paperwork or pricing or open houses or any of that mundania: the only talent that matters is sales.

If you had 10 salespeople with sales experience, would you need 40 “people” to make the same amount of sales? Doubtful. Your expenses would drop, like advertising and training and technology and office space. You could stop constantly recruiting. And productive people don’t need to be “retained” as much as non-productive people wish to be kept. Even if most managers were inexperienced and unqualified managers, they would at least have the time to learn to be better managers.

One last thought: Let’s not forget the consumer. If we base the “quality” of someone’s performance on the only valid measurement – their income – then it’s clear that 75% of the business is unqualified to be servicing customers. If they’re only earning $45k or so, it’s because nobody wants to pay them. And the research shows they are still “working” 40 hours or more a week. So the market is already telling you they don’t want to work with the people that most owners are recruiting. Consumers are afraid that they only have a 1 in 4 chance of getting the “good agent” when they call or email. They are more aware than ever that many agents really shouldn’t be in the business. If they’re selling, they don’t want to risk their equity with the inexperienced incompetent; if they’re buying, they are downright dissatisfied with who they can choose from. Remember that last year, only 36% of buyers found their home through their agent, a number that is declining every year – while 25% found it online themselves, a number that is growing every year. Buyers are telling us they don’t want to work with the majority of the people in today’s offices. Buyers are professionals themselves – professional doctors, teachers, mechanics, computer programmers – and they know “good” ones from “bad” ones in their profession. They can deduce the same when they meet REALTORS, too.

So it’s a big circle. Owners are former good salespeople with no management training; they have attended the school of “trial and error” for too long, and their businesses are crashing today, not because of the “market” but because of their broken systems. They don’t know how to manage (or why) and they don’t know why to recruit (or whom). They risk losing their good agents because they surround them with unqualified fellow agents, who take up all of the manager’s time and money, and even risk blowing-up the deals they co-broke with the good agents. The only place this system can take everyone is downward, which is why so many leave so frequently and the problem never goes away.

We’ve been talking about “fixing” recruiting for decades. Don’t you think we could have solved it by now?

Here’s a question every real estate broker should ask themselves every day: If I were currently buying or selling a home, would I work with my company? Honest brokers should not jump to conclusions. If they want to assess their company’s real competitiveness in the marketplace, they might want to find some evidence that their organization is really enticing to consumers.

It’s not hard to determine if your company is attractive to consumers. In fact, smart real estate managers can perform simple evaluations of their consumer-value in a few hours a week. Unfortunately, too many brokers believe their own marketing: “We’re the best” because “we sold more homes than the other guy last year,” isn’t a serious measure of quality. It could simply mean that your organization “sucked less” than the competitor down the street.

How can brokers honestly answer whether they would pick their company to sell their own home? Three tests can provide a good starting point.

1. Call your office and see what happens. Do it from an outside phone with a caller ID that nobody will recognize. If you want the fairest test, find a friend that nobody in your office knows, and let them place the call while you listen in (so your staff won’t recognize your voice and put on their “best behavior”). Evaluate how your staff answer the phone: was it fast, slow, clear, inviting? Did they sound bored, annoyed or truly happy that you were calling? How did they offer to help? Were they simply looking to transfer you to someone, or did they personally offer assistance? Did they suggest some of your company’s other services or just send you through to a voice mail? Bear in mind that most consumers will instantly evaluate your company based upon the first twenty seconds of interaction with whomever answers their call. How they are greeted, welcomed and ultimately serviced in those crucial moments is the “true” version of your first-impressions.If you don’t think first impressions are all that important, check with yourself. Go to the local coffee-shop drive through and ask yourself, is that what we sound like? Do my people sound as uninterested and crude as the minimum-wage voice on the other side of the ordering speaker? Just about everyone today has encountered poor service from cashiers at a fast food joint, coffee shop or even retail store. We are quick to say how “poorly” they interacted with us, their customer; but while we’re patting ourselves on the back, our own staff may be delivering the same level of disinterested, rushed, unfriendly service to consumers who spend far more with us than they do on a cup of coffee.
2. Next, try it on the web. Send in an email requesting more information about one of your listings. Use a fake email address you can setup at Yahoo or Google so nobody knows it’s you. Send inquiries at different times of the day – morning, midday and evening – and see how fast (or if) anyone gets back to you. Then evaluate what they say. Were they helpful? Was the email a big ego-trip about why the agent is cool without every asking what you, the consumer, really need? Did they ask you to “call them” rather than try to build a conversation with you by email? For some consumers – an increasing number of Gen X and Y who are never going to call your office at all – the “experience” they have during the initial few emails with your agents is their version of the first-impression with your company. How your agents react, how they engage the consumer and how they create a rapport is critical.And today, most of the email communication with consumers is done without any review (or remediation) by the broker. Spelling errors, poor grammar and lack of punctuation make your agents – and your company – look like idiots in the eyes of consumers. Minimalist answers (Just the facts, ma’am) by agents leaves consumers feeling “serviced” but mostly ignored. If hours pass by before anyone replies (and auto-replies don’t count because nobody asked to talk to your computer) then it’s not hard to imagine why consumers might be choosing a company down the street. They’ll capture that consumer if they can respond in one hour instead of your agent’s three hour delay. They win, simply because they sucked less.
3. The real test is to try out your company in person. Admittedly, you can’t do this yourself, so you’re going to need some help from friends. Setup some scenarios and just let them happen “normally.” Ask a friend to call an agent and ask to preview a home for sale. See what happens: Did the agent offer representation? Did they speak about your mortgage or other services? Did they just meet the customer at the listing, rather than bring them to the office to experience your entire organization? How much information did the agent have about the property. Simply ask your friends to be helpful and seem interested – to “shop” the experience.Then repeat the process by starting with an email inquiry. Measure the outcomes there, too.And finally – if you are really brave – ask some friends to visit your agents’ open houses on the weekend. Be prepared, because it’s probably really scary. Did the agent greet them, and try to get to know them? Did they “present” the house to the consumer, or let them wander around by themselves in total ignorance? Were they able to answer a few “hard” questions about taxes, the neighborhood or the heating system? And what happened when the test-consumers tried to leave? Agents are quick to tell us that open houses are a waste of time, that they don’t lead to sales or even good leads. You owe it to your sellers, and your company, to test out the theory that perhaps the buyers who visit the open houses aren’t to blame.

The primary responsibility of a manager or broker is to ensure that his organization is competitively delivering the “work” that the consumer needs “done.” If we’re representing listings, then how we answer the phone or respond to potential buyers online is the “work” the sellers expect us to perform. If we’re trying to attract sellers, realizing that visitors at open house are there to evaluate our skills to present a home to potential buyers changes the kind of “work” we should be doing on Sundays. Testing services can be done by “surveying” past customers, but by then, it’s really too late to do anything about their experiences (and if they were bad, we won’t be getting any referrals or repeat business from them). Great chefs taste their dishes before sending them to the tables. Maybe REALTORS should drink some of their Koolaid before trying to serve it to the rest of us.

OK, call me old fashioned. A traditionalist. Polite from an era that no longer exists. Even grumpy. But could somebody please spread the word:

Your cell phone is ELECTRONIC!!!

Here’s the story: After spending the last eight weeks on the road, I felt it was time for a break. So out to the southwest, to a nice place in the desert. A very nice place. The kind whose room rates discourage families with kids running down the hall. With robes in the room that make you sigh. Where room service actually toasts your breakfast bagel in your room with a portable toaster. Niiiice.

With great weather on my back and a book in my hand, I head down the pools (yes, with an “s”) and find a spot away from the water basketball; with no background music; a nobody on either side. Stretch out. Take a deep breath. Exhale. Close my eyes….

… and jump out of my skin! SCREEEEEEEEEEECH!

Somewhere, about ten chairs down, someone’s on their cell phone. And I don’t mean chatting on it. Or even a nail-biting ringer going off. I mean SCREAMING into their cell phone. Loud.

No, BLARING.

Ok, sure; I’m an old curmudgeon. I hate it when people are splashing in the pool or yelling MARCO! POLO! for the bazillionth time. Kids who scream “Mom, Mom, Mom, Mom, Mom, Mom, Mom, Mom” until you want to yell, “Your mother left the country!” But you know, even we overtired, underpatienced kinda guys can accept that it’s just life – or bad luck or just the Universe laughing at you – when you are trying to get two days of rest.

But shouting into your cell phone? What’s the deal?

Look, in case you haven’t noticed – there’s no relationship between the level of your voice and the speed of sound waves. None at all. A shout or a whisper will equally be translated into a signal, beamed across space and time, and received one or thousands of miles away. Every time. Whether you’re at the pool. Or on the train. Or in a restaurant. Or walking down the street. Your cell phone is electronic. The level of your voice doesn’t matter.

Oh, and the phone on the other end even has a VOLUME control. So your listener can turn you UP (although it’s more likely to be down…)

Shouting doesn’t matter to your electronic phone. Except to those around you. You know – the rest of the world? The ones who are now listening to you blare out your safe’s combination code; or your anger at your secretary; or your “billion dollar negotiation.” (Those always seem to occur in the executive lounges at airports where other business travellers can admire your negotiating prowess.)

Heck, I’m a fair guy. I’m not even suggesting we permanently implant wireless earpieces Borg-style into your skull. I’m not even asking for regulations and fines for people who turn fine dining rooms into diners. I’m not even shaking my head at signs at registration desks that say “Please do not approach reception while still talking on your cell phone.” I know we can’t fix it all. I know that the world revolves around you; around your incessant need to dribble drivel from your mouth. I’m not asking for that much.

I’m just asking for you to keep your conversations to yourself. If the other person were sitting there with you, would you shout? Would you have to scream your conversation across the train car? Would you need to trumpet your business deals across the restaurant? I doubt it.

Maybe you need to see a doctor. Maybe there’s some medical reason why raising your hand to your ear causes your voice to rise. Or your attention to cut out while driving. Or your social skills to revert, Tourretes-style.

So please; someone spread the word. Your cell phone will send your voice anywhere at light-speed. It’s not connected by a hose and two tin cans. It’s electronic. It can beam your shouting – or your whispering – to other phones. With volume controls. With earpieces. Without making your conversation into a reality show episode for those around you.

It’s electronic.

Just had a great conversation with Karen today about leads (if you don’t know Karen, she’s our Executive Director) conversion and national averages. Our consultants and trainers are constantly being asked about the “key” to success in online leads conversion: is it software, is it an auto reply, is it template emails. Well, yes, sure, all of those help. But the real key?

Managers.

Managers are the key to lead conversion success for two reasons: First, they know how much it costs to generate leads – which is a good way to help agents understand why they should not throw leads away so quickly. Only by sharing the full picture with the sales force – of what it costs to run the website, direct marketing, PR campaigns – in other words, what it costs to generate leads – can agents get a better picture of why leads conversion is so much more than just getting another deal. Converting online leads is critical to spending money wisely; if conversions don’t happen, then it’s just like throwing money down the drain. Managers (and management) can advertise and build websites; but it’s up to agents to make the sales happen.

Secondly, managers help improve leads conversion rates because they are close to the action (or lack thereof). If an agent is struggling with online leads, only managers can see why. Is it a lack of tech skills? Does the agent needs some marketing training? Are the agent’s skills in building relationships and online rapport with consumers up to speed? Only managers can see the skill problems at a company – and do something about it. Like providing training, materials, technology and encouragement.

For the past few years, the focus on leads has been on generating them and driving the numbers up. Well, the most important number really is the conversion rate. Who cares if you have a lot of leads but don’t convert hardly any? And no matter how much we provide to our agents – technology, training and even, yes, leads themselves – it’s up to our managers to see the process through and keep it working (or improve it) every day.

– Matthew

Here’s a really easy way to help REALTORS improve their understanding of marketing – or more accurately, why Generation X and Y aren’t responding at all to their marketing. No, it’s not another diatribe against listings on REALTOR.COM with no photos; nor is it a generic rant against newspapers. If you don’t get that those don’t work by now, we don’t have a prescription for you. But if you want to laugh alongside a Gen Xer like me, then let’s play a good old game of show-and-tell.

Which of the following direct-mail marketing pieces looks most like mailings you get from your local REALTOR:

This postcard from Weight Watchers:

Or this one, from Infiniti:

Hmmm…. Do you need a second to think about it? Probably not.

Why is it that REALTORS continue to promote their listings – commodities that sell for hundreds of thousands of dollars – with the same tools (and the same impact) as a Weight Watchers promotion from the local gym? Seems to me that the postcard is not only ineffective (how much information can it possibly contain?) but it’s simply cheesy. Makes you wonder just how many sellers are actually impressed when their home – their pride and joy, which they are hoping a buyer will purchase for a lot of money – is featured on a 40-cent marketing piece.

And to be clear, the Infiniti marketing piece in the photo above was actually as sixteen page brochure enticing me to pick another Infiniti when my lease is up in a few months. High quality paper, full-bleed color, and text descriptions that most listings online would die for – and I quote:

Engaging, illuminating, inspiring. The Infiniti M delivers a complete driving experience. Framed by its sleek silhouette, the M’s luxurious essence is found in an interior rich in refinement, abundant in space and supple to the touch…

Consider that the “description” on the “listing sheet” for a $55,000 car. Now here’s the description from a $1.5 million dollar listing on REALTOR.COM:

Well, well, well. The “description” enticing me to inquire on this house is a list of meaningless data.

Single Family Property, Area: San Francisco County, Subdivision: DOLORES PLAZA, Approximately 0.1 acre(s), Year Built: 1904, Garage, Central air conditioning, Basement, Laundry room.

Wow! It has a basement! And a laundry room! That’s so cool! I didn’t expect to get a laundry room with $1.5 million dollars. What a baaaaaagain, as we say in Boston!

How pathetic.

At least this listing sheet was online, where a bunch of photos were actually included. But even if a picture is worth a thousand words, do you think maybe the REALTOR could have spared a few words to at least tell me how exhilarated, enticed or at least happy I would be if I purchased this home? I mean, for $882 a square foot, don’t you think maybe a little story telling might be in order? Well, at least there’s a button for “printable brochure” – maybe that’s where the agent put in the really good marketing effort, I thought, so I pressed it, and here’s what I got (I have cropped the agent’s name and company/phone numbers because I’m a nice guy…):

Not exactly a sixteen page marketing brochure that excites the senses, would you say?

Just what kind of fantasy world do REALTORS still live in, to expect that a single-page of “facts and figures” with a couple of photos – one of which always has to be the agent’s high-school photo – is somehow going to “impress” buyers? Buyers don’t purchase homes because a particular room is 12 x 17 or has a “rug” or the roof is “shingled.” They buy homes because they appeal to their senses, their desires, their dreams. Where are the words describing dreams in the listing sheets today?

One pathetic, ink-jet printed page on recycled paper. That’s how most REALTORS market homes today. They take a buyer to see their listings and they leave them with a “printout” that’s not even glossy. This is marketing? This is how to sell a product that’s competing against lots of others in the marketplace, that the seller is asking hundreds of thousands of dollars from the buyer, that the agent will make a few thousand dollars commission themselves from the sale?

It’s insulting. It’s maddening. It’s ridiculous. No self-respecting Gen Y’er who stops by your open house after coming from a car dealership where they picked up a really cool, multi-page brochure describing their totally exciting, impressive, sexy new car is going to stop and say, “Wow! I gotta have this home!” Gen X sellers – if they list with the one-page-marketer-REALTOR – and who can put their own photos and video commercials online – aren’t going to be impressed by a pile of paper sitting on their table as an example of “your marketing efforts” for their home.

Even Baby Boomers are shaking their heads at the wimpy listing sheet. For years, they have been calling “Craftmatic Adjustable Beds for a free video tape” of a product that only costs a couple of thousand dollars. A video tape, sent by mail, to sell a bed. And REALTORS are still promoting homes on a single piece of paper? Pathetic.

When is a recession NOT a recession? When the definition of economics can be changed to fit the politics of the day, that’s when. How can the “country” be in a recession when so many companies are reporting great growth? Consider these headlines from the Wall Street Journal:

• Visa Inc.’s fiscal second-quarter net income rose 28%, as the credit-card transaction processor posted its first quarterly report as a public company. by ANDREW EDWARDS April 28, 2008 5:00 p.m.
• International Business Machines Corp. posted a 26% jump in first-quarter profit, supporting investors’ hopes that corporate spending, especially overseas, may be a bulwark against the deteriorating U.S. economic picture.
• Apple Inc.’s iPhone and iPod get most of the limelight, but it was the company’s decades-old Macintosh computer business that defied a broad slowdown in consumer spending to deliver a 36% increase in profit.
• Caterpillar Financial Services Corporation (Cat Financial) today reported record first-quarter revenues of $779 million, an increase of $66 million, or 9 percent, compared with the first quarter of 2007. First-quarter profit after tax was $124 million, a $1 million, or 1 percent, decrease over the first quarter of 2007.
• Oak Brook, Ill.-based McDonald’s Corporation, part of the Dow Jones Industrial Average, said it earned $946.1 million or 81 cents a share, up from $762.4 million or 62 cents in the first quarter of 2007. Foreign currency accounted for 5 cents a share of the latest quarter’s bottom line, the company said.

So, let’s see: A Credit company, a computer company, a consumer goods company, an industrial equipment company, and a discretionary food-services company. All of whom are both national and international players. Hmmm… what’s going on here?

What about unemployment? Let’s see:

• April 25, 2008 NEW YORK — Prices of U.S. Treasury securities fell Thursday after a government report showed a surprising drop in unemployment claims. In late trading, the benchmark 10-year note was down 25/32 at 97 11/32 to yield 3.83%. Investors have been concerned about the weak economy’s effect on the labor market, and became a little less worried after the U.S. Labor Department said initial claims for unemployment benefits fell by 33,000 to 342,000 in the week ended April 19. Economists had expected the claims to rise by 3,000.

Well, that has nothing to do with real estate, you might argue. Isn’t there a real estate recession? The market is still down the tubes, right? At least that’s what all the reports and insiders say. But let’s ask a few questions:

First, if the market is so bad, wouldn’t real discretionary income be down? If everyone’s savings are tied up in their home who has the money to drive Apple’s profits up in discretionary purchases of entertainment, or consumer credit card purchases, which must be at the heart of Visa’s profits? If times are so “uncertain” wouldn’t you expect consumer credit issuers and recipients to be issuing profit warnings? How can they be reporting “record” profits if the consumer is spending all of his money on the so-called expensive price of a gallon of gas?

Second, who’s lending all the money for capital spending – certainly farm equipment and construction equipment aren’t purchased on a Visa credit card? So somebody is lending somebody money to fuel Caterpillar’s growth… could it be that some projects still have a profit possibility and some banks aren’t having so much trouble lending to credit-worthy developers?

Third, if the real estate market is really stuck – if prices are falling and buyers “report” that they are going to “wait until prices fall lower” then why did the house next door to me sell in under 2 weeks? And it’s not the only one. Here’s a few quick Trulia trends (because I couldn’t find it anywhere on a REALTOR site… but that’s another story…)

The working neighborhoods are selling just fine:

Upscale towns seem to be fairly healthy, too:

And the “working class big city neighborhood” is a fair view of the non-devastation of Boston’s market:

Certainly, many other towns could be selected; some would certainly show deep declines – like Lowell or New Bedford or Roxbury – but many others would be equally stable or even growing. So it’s all about averages, then? If we average them all, we get a “net” positive or net negative market trend.

Still, I don’t buy it. It can’t all add up to a crisis for the average homeowner at the same time there’s a boom in consumer credit and discretionary spending (and no, it wasn’t the so-called stimulus checks because while they may be stimulating “some” of us to spend money we never earned, it had to come from the “others” of us who have had to curtail our spending since our Uncle robbed us…)

Could there be two economies? One that’s booming while another is failing – and that’s the one that the media love to harp on? No, that’s not possible, because Visa, Apple and McDonald’s are in every marketplace, so they would be effected by the down and the up economies. If the overall “net” effect is supposed to be down, how could they still be up?

Maybe something else is going on. Maybe some homes are selling – despite the so-called recession, and perhaps by and to the people who work for the profitable companies? Looks like some REALTORS know how to price homes in any market to attract the qualified buyers in any market. Looks like not all markets are in crisis; not everyone is in foreclosure; and not all banks have halted lending.

Too bad nobody’s telling this story – most of all, a million REALTORS aren’t saying a word about it…

Ok, today’s blog entry is a cheap shot, but there’s a bigger story later on – so stick with me…. And you’ve heard it before, but if there’s one constant in this business, it’s that you can lead a REALTOR to water but you cannot make him think… or was that a horse and drink? Oh, who knows… but one thing’s for sure: You can give a REALTOR a digital camera but damned if they’ll use it.

Here’s the fun part. Go to REALTOR.COM and do the following search:

• San Diego, California
• $1,500,000 to No Maximum
• Single Family

When the search results appear, click Sort Results by Number of Photos.

Then click page 30 to go to those with the least photos.

Ok, I did it for you (you knew I would… )

As you expect, all of the usual frustrations apply: Do the sellers know their multimillion dollar properties look worse than a Craigslist ad? Are these agents really capable of selling luxury property if they’re not competent enough to load photos with the listings? Who is supervising these agents – and the services provided to these clients?

If these agents were listing Donald Trump’s multimillion dollar homes, what would he say? Right: Agent… You’re Fired!

Alas, there is even more though than could be said of these eerily incompetent listing presentations. Notice that they are “Showcase” listings. And one is “Internationally Featured.” How is that possible? Oh, right: Advertising money. Makes you wonder just how much these companies are simply brands of marketing rather than brands of repeatable quality performances. Obviously it would seem that anyone can just give REALTOR.COM their money and their listings can be “Showcased” without any care to check if the quality of the information is appropriate.

This is a major mistake by REALTOR.COM, too. If their site can contain “premier” properties that are supposed to be “promoted” and showcased to the top of lists but their information display is dreadful – bordering on useless – then could it be possible that consumers will come to think that REALTOR.COM is no longer a source of good and useful listing data? When consumers look at an 8-million dollar property without a photo, do they really blame the agent – or are they thinking, REALTOR.COM really sucks…..?

Makes me think of a trend emerging in employment websites: Monster.com became so full of crap – old resumes and junk data and people who may not still be alive let alone job hunting – that a number of new “higher quality” employment websites has emerged – like The Ladders or 6FigureJobs.com
When the data on a site just becomes so much noise and waste, consumers quickly look for quality alternatives. Same with real estate sites, possibly, when the value of their listings starts looking like a flea market rather than a trustworthy database.

So sure, these agent are idiots. The sellers are even greater idiots for listing with them – or at least not reviewing their own homes’ appearances on the web – an