We are now approaching the 3rd month of the year 2003. The real estate industry looks back on another record year. From Seattle to Denver, from Los Angeles to Dallas, from Detroit to Atlanta, from New York to Boston, I am seeing some common threads that both excite me and concern me.
The heart of whatever I pen in this article could have been written at least 4 other times in the 26 years I have played in this game. In fact, on many occasions, I am certain that I will repeat things that I, or others, have written before during that same 26 year period of time. Truly, only the time in history and certain events are different. That in itself concerns me because if not careful, I could just as easily fall victim to these thoughts as I could become master of the situation already upon us.
Let's deal with the concerns first.
Volume was actually up on the average transaction but the number of transactions slowed. Listing inventory appeared to stall (no real depletion, but no gain either). Greatest slow down in productivity seemed to come from the more seasoned agents. The productivity slowdown by seasoned agents was greater than the dip in open transactions. In new listing activity, seasoned agents dropped even more significantly.
These issues concern me because we have a generation of successful sales professionals in the middle of what some are calling an "at stake time" in their career or "A MOMENT OF TRUTH". It is during these times that many who have been successful in the past become victim to the very things that led them up the mountain.
The old path is blocked, the bridge has been washed away. The first real storm of this new century is upon us, but we still want to go the way we always have gone even though the journey is now known to be a greater risk than the reward offered. It seems as though all of this is taking place in plain sight of everyone connected to this game. The variance might be that the newer agents and new customers are choosing a different path than the journeymen. These two groups seem to be walking side by side and there is a special harmony being sung.
What is it that is keeping many who are considered part of the tried and true on the path of diminishing return? Is it ego? Is it stubbornness? Is it blindness? Is it total disbelief? Is it a demand for control that will no longer be tolerated by this new customer? Is it tradition? I wish I had clear and definitive answers.
On the basis of yesterday's success stories, there will be many that will make the transition. In fact, many already have. Sadly though, there will be too many good agents who will fall by the wayside and watch their glory days fade like old photographs. Change can be a killer. I am reminded that as large and as overpowering as the dinosaur was, its worldly dominance and even it's very presence disappeared because it could not or maybe would not adapt to the change that rocked it's ever so comfortable world.
On the bright side, there is a segment of agents with approximately 30 days to nearly 2 years in the business, that have actually outpaced the market. In short, it could be this portion of the overall agent population's energy and the willingness to put "new think" training into action that has kept the industry ship still sailing forward.
Does the economy, the threat of war, the uncertainty of what was taken for granted yesterday have anything to do with what is transpiring in the sales ranks of the real estate industry? ABSOLUTELY!
Maybe, the most important thing to look at is the common thread that seems to connect the new agent population with the face of the new and continuously evolving customer. It seems that both of these groups acknowledge and communicate their uncertainties yet collectively welcome new thoughts and directions to get the end result both seek. Bottom Line: the new agent is evolving at the side of the new customer as this evolution moves forward. For the first time in many years, the "new customer" is meeting with a "new agent" population that is cut from a similar cloth to them.
The new customer and the new agent have different expectations of themselves, each other, the tasks to be performed, who will perform certain tasks, how the costs for the many new services demanded will actually be paid for and ultimately how that will affect the relationship that develops from the point of closure forward.
This new breed of customer and new breed of agent, seemingly coming of age at the same time could be having a major impact on those agents who have been the benefactors of what many have called "market driven" success stories. The nineties produced an almost euphoric sense of comfort in the way business was practiced. And, while many failed or even refused to acknowledge what was going on economically in America, the events of 9/11 put an exclamation point on the end of a time that any of us could or will ever again take for granted.
The positions of manager and trainer are sure to be redesigned. In fact, they are likely to be replaced by that which is most needed to build a championship team; a bank of "recruiter/coaches". The office secretary/receptionist will evolve into a more responsible positioning and start doing what historically was expected from "yesterday's" manager. The salesperson will stop trying to sell what can't be sold in the first place, and instead will start "leading and directing people to good decisions in moments of truth". Transaction management, listing management and a host of other information-based tasks will be handled by anyone but "yesterday's agent". The "new customer" will bear the burden of menu added costs in addition to commissions now charged and they will continue to seek reductions in the cost they incur. The costs however, will not go away, because the service demands and the continued evolution of technology will drive the costs for services up, not down. We live in an expensive world because we demand more with each passing day and each passing experience. The costs will continue to grow with our comfort and security demands.
The new agent's cost of doing business will rise, but the number of transactions (and therefore earning potential) will likely increase because the tasks performed will be tasks that generate revenue rather than tasks that cost the agent productive time. This new agent is fast becoming the next generation of those agents that brought us to this place.
The change is in play. We have a new customer. We have a new economy. We have a new world. The demand for new agents, new services and new results is on us. We are not facing the coming of an ice age. That has already come and gone. What we are about to experience is a series of "Moments Of Truth". The big question lurking isn't who will survive these moments, because real estate is filled with survivors. Rather, there will be many questions. Like who are the new players in the real estate industry? The banks are wagging their tongues and are absolutely setting their table for the ensuing feast (recent moves by congress have only temporarily closed the door, the door is not locked). The "new think" brokerage owners have some pretty bold plans in their minds and the "new think agents" and "new think customers" are already playing the game differently.
The franchisors and the large regional independents may be at a slight disadvantage because of their vested interests in existing strategies. While they may have deep pockets, there just seems to be too many layers of cake to cut through before you can even get to the appropriate division where hard and fast decisions can get made. Many times, it is too late for the feast and the leftovers aren't worth picking over. No harm or foul, it's just the nature of that particular beast
Franchisees and independents of respectable size and productivity may hold the real advantage because they may be best able to handle any quick changes. The organized groups of brokerages are likely to hold an even greater advantage because they can still act and respond like the smaller brokerage houses, but can also stand up to most if not all local storm fronts on the financial horizon.
In the end, I am reminded of a story where tradition ruled over one holiday meal every year. Each year the mother would cook a fine ham. Each year she would cut the end of the ham off before cooking it. One year, the mother was asked why she cut the end of the ham off before cooking it and she replied because that is what her mother always did. When the grandmother was asked why she had always cut the end of the ham off before cooking it, she replied that her mother always did. Then one of the grandkids asked their great aunt why she believed the end of the ham was cut off. The great aunt replied because the pan used way back then was so much smaller than the ones used today.
Without too much translation I have the feeling that the basis of this article could easily find its way into any other industry when change is in the air. There has been a lot of wasted meat over the years because of tradition. We see a lot of wasted opportunities in every business and much of it can be traced back to a pan used many years ago that was much smaller that the ones we use today. Tradition is a wonderful thing but it is holding some really great folks back from a much greater success. This may be an exceptional time for some of us to take a new look at the way our business is being transacted. For some, it could mean a bigger ham or a bigger bird on the table next Thanksgiving. In times of change, traditions are challenged. When traditions are challenged we are forced into "Moments Of Truth". They can be good for us.
