Eric Stegemann tweeted this the other day: "Thinking about how dinosaurs relate to real estate - the nimble and adapting ones survive, but the big ones did not. Took years for extinction." It is the "years for extinction" part that really caught my eye. This weekend I had had a conversation with a friend's neighbor that made me wonder if real estate really is ever going to evolve. Will agents who are doing business in the "old way" ever adapt or go extinct? As someone who is enthusiastically in favor of industry evolution, the following conversation put a dent in my zeal.
I saw a for sale sign in front of his condo and asked the seller how it was going. He said, "great - it sold in the first week!" Wow, I thought.
I asked, "What did it go for?" He responded, "$370,000. It went for $10,000 over asking price, and I also had a bid for $20,000 over asking price."
When I asked him why he picked those buyers, he said "because they had a down payment, and they loved the house". I know from my real estate sales days that putting together a deal that will actually close is an important part of the Realtors job, and it appeared that this seller received some good coaching from his agent in this regard, especially since the financing on the higher offer sounded weak.
But here is where the conversation got alarming for me:
Me: "How long is the contingency period?" Seller: "I don't know, what is that?"
Me: "How much of a deposit did the buyers put down?" Seller: "Don't know, my agent never discussed it with me."
Me: "What was the commission?" Seller: "5%"
Me: "How did you pick your agent?" Seller: "She sold the house next door. I gotta tell you, she is one high energy woman. There are times she calls me and she just yammers. It's all I can do to get off the phone with her." (his tone was annoyed...I didn't get the impression he liked her much).
Then, at the end of our conversation, totally unsolicited by me, the seller concludes our chat by saying: "Let me tell you, she is an outstanding agent. I'll go out of my way to recommend her to anyone who needs a great agent."
WTH? This seller would give his agent a 10 on the Net Promoter Score that Rob Hahn of 7DS Associates evangelizes. A 10! Unbelievable to me.
I went to the agent's website. When I go to the "About Us > My Background" page, it has her name, a broken image (which I assume is her photo), and nothing else. She has a navigation item for "Featured Properties" but none of her listings appear. It then defaults to a search for property in Alabama (to be clear, we're in California).
What exactly is this agent's real estate talent? Finding uninformed buyers and keeping them in the dark? I understand that the client signed the paperwork, but I can't imaging representing a seller and not even discussing the deposit amount, nor the contingency period with them. This is astounding to me.
I just have to throw my hands up in the air and ask - how does one compete with this? There is much talk about internet buyers, and leads, and Realtor professionalism, and a new model of real estate. But, NONE of that played a part in this agent getting this listing, this agent selling this house, or this client's level of satisfaction with the deal. Where is the motive to change? Why on earth would the agent, or client, look for a new way?
I think it is going to take a VERY long time for the old dinosaur to become extinct.