I decided to sit down and write this article to provide some insight for the industry to consider.
These are true confessions I have made that caused me to pause and caused me to rethink and regroup — things that I did not fully understand at the time.
So here goes a deep dive into my confessions about some of the most controversial topics in our business. I already covered my first three confessions last week. Here are the final three:
4. MLS
There are so many talented professionals in the MLS industry. Extremely hard-working people who, not unlike the brokers, struggle each day to keep the value of what they do viable.
Against all odds.
The core issue with the MLS is not its people. It is the rules and policies that burden the people involved. A nearly 40-year-old business with rules that have been outdated and ineffective for years — and with little to no hope for change.
Why? It is because the National Association of Realtors — not the brokers — dictate the rules and policies of the MLS. This is another classic example of pleasing the masses all for the sake of achieving the objectives of a membership-driven business.
So here’s the rub.
NAR is a membership organization that operates solely with the objective to level the playing field for the brokerage community. A classic example of everything needs to be equal for everyone.
Trophies and plaques for everyone. Member benefits for all.
The objective and rules of the MLS are diametrically opposed to the brokerage industry’s objective of creating a fiercely competitive marketplace.
Mix the two objectives and you have an oil and water situation at its best.
I must confess that I never understood IDX. Give your entire listing inventory to a local competitor to sell? Brokers complain about competing ads on portals, and then they gladly share their listings for their competitors to use to get buyers for free with the same people who are buying ads on the portals?
I’m confused. Or maybe I’m not.
The new data manager that will triumph in the future will enable full choice for the listing brokers, and the playing field will be purposely and significantly unleveled.
There is only one thing worse than someone misusing your data: It’s someone who tells you what you can and can’t do with that data. And that, my friends, is the MLS by design.
So as far as discussing this subject any further goes, I rest my case.
5. Franchising
I am very concerned for the real estate franchises. Especially those franchises that were created with the promise of any control or capture of the consumer’s attention based upon the use of a particular brand.
This is one of my most difficult confessions I have to make because real estate franchising was once such a big part of my world.
So, I must confess that the Internet took most franchises by complete surprise. That dealt a real blow to brand franchising and changed forever the ultimate control of the consumer.
I was there back in those days, and I remember what was said and not done in those days. Over time, the brands have essentially been rendered irrelevant in search while the online media portals have focused, developed and conquered the essentials of the search engines.
The importance of being able to source and find the product — the listing — unfortunately now far outweighs the value of steering a consumer to a brokerage company through the use of a recognized brand.
Every listing comes with a brand, a broker and an agent, but none of those things are searched more than the features and aspects of the product.
Time will tell what change will occur in the long run for the franchises, but for now I must confess that I have my concerns about the long-term well-being of the franchise business model in residential real estate.
6. Consumer experience
Whoever offers the consumer the best consumer real estate experience will win in this industry.
I must confess that I have searched high and low for an example of an amazing branded consumer experience, and I cannot find one.
When I say consumer experience, I don’t mean the user experience on your website; I mean the way your company — your brand — as seen and experienced by the consumer.
I’m talking about how your online experience on the Internet and in mobile is integrated with your offline experience as your people take the baton and serve sellers and buyers.
The question “Who are you as a company, and what do you stand for?” is critically important.
The greatest defect in an industry represented by independent contractors is that there is no predictable or duplicatable consumer experience. While consumers welcome change, we seem to fear it. This is not good.
If this industry persists in its pursuit and support of 1.2 million ways to do real estate — a different way for every agent out there — no good will result.
The opportunities for companies that provide a more structured process have never been greater than they are today.
A home purchase or sale happens only a few times in most people’s lives. Knowing what is supposed to happen and when are two of the very basic, yet important, aspects of helping consumers understand what we do and why we are needed.
I must confess that leaving that process as something random and varied is not a good thing for our industry nor is it good for the consumer.
Most of my time has been spent trying to help the industry see the opportunity in change. And to do that, most often we should give serious consideration to throwing out the baby, the bathwater and the bassinet.
It amazes me at how much time we spend as an industry trying to justify what we have done and why we do it. Fiercely competitive brokerage companies focus on the small improvements to the status quo, while others study it and then simply offer significant changes to the consumer directly.
And presto, they win the consumer.
The portals embraced the consumer’s desire to search for properties nationwide while the industry clutched and tried to protect its data.
The thought is always that if we could only starve out the competitive threat by cutting off the supply of the data, we somehow think it will be a win for the industry.
It’s not — and it’s very far from it. Just ask the consumer.
The next big thing in this business is to dissect and revamp the entire transactional process and to deliver it as either an industry standard, a brand standard or a brokerage standard.
And so there you have it.
Six fundamental industry topics and the true confessions of an industry veteran communicated with straight talk.
For the past 36 years, I have learned that positive change is most often derived from the most diverse and disruptive change. The type of diversity that challenges our conventional wisdom and traditional thinking. The type of diversity that is responded to directly with bold innovation and decisive actions.
Take this time to examine all that you are doing, and my hope is that you too will have some true confessions of your own.
Read “6 true confessions of an industry veteran: Part 1.”
Kenneth Jenny is an expert in the residential real estate brokerage industry and real estate marketing.