The recent Touchstone for Excellence conference in Orlando billed itself as the “First National Conference on Real Estate Standards.” History might record it as the “standards shot heard around the world”.
The meeting, sponsored by three of the nations most prestigious and progressive real estate organizations, the Orlando, Chicago and Houston Associations of REALTORS®, brought together almost 300 industry leaders, visionaries and activists for two days of what can only be described as a mind-numbing reality check.
While the pace of the sessions kept participants glued to their seats, it was the substance that heralded the fact that “best practices” and “uniform national standards” are subjects whose time has come for this great industry.
The Orlando leadership team, CEO Belton Jennings and the ORRA staff are to be congratulated for providing both the mill and the grist for this very important (and long overdue) professional interaction.
The program ignited with a bang when Marriott International Senior Vice President Roger Dow’s keynote address shared his vision, and indeed the Marriott organization’s obsession, with standards.
In a presentation distinguished by crossover references between the hospitality and real estate industries, Dow became the first of many speakers to underscore the concept that the consumer is the centerpiece of the transaction in today’s economy.
He was right “on point” when he said that those who fail to recognize this reality will not long survive. Dow drove home to the group that customer-pleasing standards must be relevant, consistent and universal.
Cleverly anticipating those who would suggest the real estate industry is somehow “unique” and not subject to the forces of today’s business environment, the program next featured a panel of three experts representing the institutional, service and professional sectors of the American economy.
Valencia Community College’s President, Dr. Sandy Shugart, reviewed the recent events of the academic world saw the college student go from the cannon fodder of academic battles to the prime mover and consumer.
Responding to those whose questions asserted that independent contractors were somehow immune to standards, Dr. Shugart adeptly pointed out that no creature on earth was more independent than the tenured professor, but even that group has had to fall in line with the standards movement.
Addressing those who see the real estate industry from the perspective of customer service, Darden Restaurants’ Vice President Wayne Kalish presented the critical role standards play in their industry and the challenges of establishing, promoting and maintaining them throughout thousands of outlets, including the Olive Garden and Red Lobster brands.
He quickly dispelled the notion that providing services was somehow a “people business” immune from standards in favor of personal interpretations by their service providers. He carefully outlined Darden’s research that firmly establishes the fact that today’s consumer is looking for a dependable, predictable experience in every economic and life style interaction.
For those who were hoping to find refuge in a sense that real estate is a professional enclave and thus immune from standards, CPA Dan Gallogly provided a sobering view of his profession’s experience with standards over the past five years.
In typical accountant fashion, Gallogly, the senior partner in one of Florida’s largest public accounting firms, outlined in detail the process through which the accounting profession identified and formalized its many best practices.
The conference then looked at standards from the regulator’s viewpoint. Florida real estate commissioner Matey Veissi provided an interesting insight into both the limitations and potential of the regulatory process relative to standards of daily business practice.
Her passionate interest in the quality of the real estate transaction was obvious throughout her presentation, as was her sense of reality with respect to the limited role regulation can play in mandating or encouraging daily business practices.
Florida Real Estate Department Director Jason Steele then spoke about the types of cases and consumer complaints his agency receives. It became immediately obvious that industry adoption of even the most minimal standards would make a big difference in both the consumer experience and the industry’s ability to police itself.
The 2004 Association of Real Estate License Law Officials (ARELLO) President-elect, Dr. Wayne Thorburn, CEO for the Texas Real Estate Commission, shared his agency’s perspective and enforcement statistics, further validating the already growing sense among the participants that the time to address the critical issues of best practices and standards of practice had come.
The E & O insurer’s perspective was provided by Rick Monahan, Assistant Vice President for Real Estate Claims for XL Insurance Programs, a major E&O insurer for this industry and the successor to Kemper Insurance.
Monahan unleashed a blizzard of statistics and disclosures as he told the story of an industry whose traditional behaviors were increasingly running afoul of both the consumer and the legal system.
This session included a survey and discussion among participants about current E&O premium and deductible experiences around the country. The participants, including NAR President Walt McDonald, reported rate increases of 50 to 100% and all-too-common new deductibles of $25,000 to $50,000.
It was clear from Monahan’s presentation that more increases can be expected unless something is done to align agent performance with current consumer expectations.
The program then examined the implications of standards on brokerages through the eyes of big broker and transaction management expert Ike Broaddus who outlined the role standards of practice play in his firm’s operation and how he used technology to track and measure them.
Quality Service Certification CEO Larry Romito brought the crowd to the edge of their seats with his passionate and informed presentation about an industry that celebrates and rewards sales volume to the exclusion of quality, consistency or customer satisfaction – or worse yet, believes that volume implies the other three are happening.
NAR President Walt McDonald and Immediate Past President Cathy Whatley provided their viewpoints as part of an Association Leadership Panel that was asked to discuss the role of associations in identifying best practices.
The third member of that panel, Montreal Real Estate Board CEO Michel Beausejour, surprised the participants when he reported that the Canadian real estate industry has been working on a standards project, Shield of Excellence, for over a year. He shared both the steps in the process and their success to date.
Probably the most captivating presentation was delivered by Lending Tree’s Senior Vice President Eric Cunliffe. Expected by some to be the “hostile witness” of the conference, Cunliffe held the group spellbound as he carefully explained Lending Tree’s customer-centric business model and its probable destination.
One could see the enlightenment grow as he talked about the results of their consumer research and how they applied it directly to the day-to-day delivery of real estate services.
In conversations following his presentation, it was clear that a whole new understanding had been gained regarding the role LendingTree, and more importantly its consumer-centered standards, would be playing as the industry moves forward.
The conference’s final presentation featured nationally famous trial attorney John Morgan. Morgan’s comments, which transitioned from academic observations through ethical pleas into a wonderful closing argument, presented the participants with a view of standards from the jury box.
Morgan’s closing message was clear and direct: Clean up your act on your own, or I’ll see you in court where I’ll win for the consumer every time.
The wrap-up of the conference saw the Chairmen and CEO’s of the sponsoring organizations announce plans to study creation of a standards institute through which the industry’s best practices could be identified and promoted as nationwide standards of business practice.
A planning group drawn from among the conference participants will convene during NAR’s Mid-Year Legislative Meeting in Washington to begin the work.
· Looking back over the conference, three basic messages emerged:
· Every business segment of the American economy is actively responding to the new consumer and the need for clear standards of practice.
· The real estate industry is not exempt from this process.
· If the industry does not identify and promote its own standards of best practice, the task will be performed by third parties whose motivations and agendas will be in their, not the REALTORS®, best interests.
The conference made a powerful and cogent case in support of standards and for the delivery of quality consumer-centric real estate services. However, this case did not originate with the Touchstone for Excellence meeting.
While “Touchstone” may have captured the sense of urgency surrounding this subject, it was merely reflecting a point being made by tens of thousands of real estate consumers every day in markets across the country.
It’s time to respond to this new jury.
