"Why doesn't my agent send me any properties?" - The Changing Times

"It's been weeks and my agent hasn't sent me any properties!"

"Do you think you'll be able to find something by this date."

These are among dozens of questions I hear discussed around this topic, almost always with a tone betraying a combination of frustration and angst.  

What I hope to drive home today is how the modern era of real estate has changed the role for buyers and real estate agents alike and that by understanding and owning this we can all operate a bit more like ninjas.  Let's dive in!

Where we've come from

Real estate refers to real property ownership, as opposed to personal property ownership.  In that sense real estate is as old as ownership itself. Agency is a newer concept and everything associated with a Realtor is yet again newer.  

Understanding the way things were is going to be paramount to understanding how things are now and how to optimally operate within the current era.  So, 200 years ago when you wanted to buy that house just off main street, what did you do?  You probably went down to Mr. Johnson's pharmacy, dry goods store, and real estate stand.  When Mr. Johnson wasn't bloodletting or selling oats from farmer Joe's farm, he'd gladly sell you that lot of land.  

Fast forward to the advent of the National Association of Realtors, no longer did you have to guess whether that snake oil salesman, pharmacist, or teacher had the right or integrity needed to truly sell you a piece of property -- the Association vetted people and made sure they had the training and the general integrity to serve you . . . and you'd know that they did because they would operate by the term Realtor. 

As technology advanced within the real estate world, the tool that revolutionized the industry, namely the Multiple Listing Service, meant that you no longer were beholden to the listings that one agent had, but rather an agent could easily collaborate with other agents in the market to achieve a successful sale of a property listed with any other Realtor. Wow!  So we went from Agent Bob being able to sell us any of HIS listings to Realtor Rene being able to sell us ANY listing (listed by a fellow Realtor).  This sounds slight, but it had major implications!

And how do you know what properties were available?  For that you simply need to go to The Book -- the MLS book, that is.  This book was a representation of "what's on the market."

Introducing:  Disruptive Innovation

But alas nothing is as it was, and nothing ever will be again.  There is no sacred and common anymore.  What your cubicle-neighbor makes compared to you is only a google search away.  What your actual neighbor paid for their home and when they took out a second mortgage is also no longer sacred, or difficult to find out.  Instead of traipsing down to the archives of the County Recorder or some other confusingly-named government office one must only fire up Chrome, Safari, or (shout out to my laggard readers) Internet Explorer to find out such things.

The movement often referred to as the Digital Revolution changed the way we encounter data, and the way it can be accessed.  Instead of relying on Data Brokers (newspapers, TV news anchors, books, encyclopedias, etc) we can call this information forward on demand . . .at any time . . . from anywhere with a cell signal or wifi network.

As we have moved deeper into this revolution we are orienting all things in our world around it -- even the TV service providers are starting to realize that if they don't let us access things "On Demand" then they will find them selves "Un Employed."

And so it is with real estate.  In the bygone days of the MLS book you NEEDED that real estate broker in order to have the information.  They, and only they, were the holders of the sacred book.  That book was the market!  If you wanted to buy your forever home . .  . the book!  If you wanted to buy an investment property . . . the book!  If you wanted to know what your home is worth right now . .  you need someone who knows the book and can apply it to your life.  In that way the role of an agent was part broker and part pundit.  The book was central to the value of an agent, and there was only one broad door to it.

Fast forward to today and the sacred Book has become common.  Instead of a book sitting in brokers' offices we have the Multiple Listing Service websites that are native to each individual Association of Realtors.  These are valuable warehouses of data and hold vast resources that allow agents (at least the ones who are excellent at their craft) to wield the data well and consult with their clients in a value-adding way.

BUT

No more pundits!  No more prognosticators!  No more priests in this profession!  This data, once the exclusive right of the local Realtor associations, is syndicated to dozens of different websites, many of which syndicate to yet again more sites.  Many of these 3rd party sites--which drive their own revenue not from the sale of homes, but by selling YOU on agents, lenders, and other service providers-- pulled the data from an intermediary service that stood between the MLS and the end user, which created a bit of lag.  Plus some of the input fields integrated wonkily and that had a poor UI/UX effect, so Zillow flipped the switch and said "let's pull straight from the MLS."  A few years ago Realtor.com was THE site that could say "ours is the freshest from the tap," but now the email alerts from Zillow come the same instant the MLS feed sends the email.  

The data syndications is becoming better and better.  Consumers are becoming smarter.  You understand that just because an agent calls you because you favorited a home on Redfin doesn't mean that agent knows a house from a hole in the ground.  Simply that they can fog a glass and they paid Redfin some money.  You also know that the house you favorited was:

1. - Built in 1956
2. - 1,247 Square feet
3. - Seems to have changed from a 2 bed 1 bath to a 3 bed 2 bath since the last sale
4. - Was last sold in October 2007 for $92,000
5. - Received a notice of "lis pendens" (whatever that is) in July 2012

We can very easily take this for granted because it is so easily accessible now; and this is precisely the point.  You, regardless of who you are, have access to this data.  If you can fog a glass and operate a computer or a smart phone you have access to the data that once was SO unaccessible and SO effortful to find even when it was accessible.  

When this happened in the 1400s with the printing press it killed the business of selling indulgences, but it took time.  What it did not do, however, is eliminate the job of a priest.

In a somewhat analogous way, now that the data is widely available it has necessitated that the real estate agent role become less about "finding the data" and more about knowing what to do once there is something to do.  

The New Day of real estate agents

"So what is the purpose of an agent?" Is the question that begs to be asked.  

If we can readily access data -- any and all of it -- and if the agents don't have a sacred data source that the general public can't use someway or somehow, then what value can a real estate deliver that merits their pay?

I would propose that in the modern day of real estate there are two roles an agent can play and be of use:  Gofer and Consultant.  

A Gofer can "go for this" and "go for that" and can be of use doing any of the various things involved in buying and selling real estate.  As a modern agent I arrange for a number of things to do be done in the process of selling or buying a home (simplified lists in a forthcoming article) that fall into the Gofer role.  The agent does "this and that" so that the client does not have to.  

A Consultant is a 4th wave kind of role that has become commonplace in the knowledge worker society, yet we can fail to see this role within many "legacy industries" -- like real estate, insurance, lending, and financial services to name a few.  Much of the core value an agent can and MUST provide is in this role.   If we are putting our hands to the plow over and over again in the field of real estate then we better understand the craft and be able to help our potential clients accomplish their goals in their real estate transactions.  If an agent doesn't have that ability then they can only effectively be a Gofer, and Gofers aught not be paid the same as a Consultant . . . ask any industry . . . ever!

Part of the practice of a modern agent must center on helping people understand what they hope to achieve in a real estate transaction and then to craft a plan to help them achieve that.  Much like a consultant with Ernst & Young will take the data that a company already had access to and help the company apply it to achieve the objectives they are striving towards.  A modern real estate agent must dig deeper and deliver a similar consultative approach to their clients.  Agents cannot stand idly by and watch people make un-informed decisions that have such large consequences, but rather must add value and help the client be sure that the decisions they make aligns with their total objectives.

Your Nuts!  And bolts . . . bringing it all home

Should be and do-be are different worlds in many areas of our lives, including real estate.  What an agent "should do" and what an agent does are often as unrelated as what we should do for our health and what we actually do.  Why is this and how can we affect a change that allows each party to be best served and all "win" together?

It's rather simple, yet is anything but easy.

Quick, how many agents do you know?  

If you're average you know between 2-7.  If you live in a 1st or 2nd tier metro and are active media then you are "friends" with at least 30, and one step removed from 900+.  

Alright, so the first facet to the issue is that they are a TON of agents!  I mean a lOT!  And you know several already.  And as long as The Misleading Math of Real Estate:  Agent Bait is true and the market allows it, then this isn't going to change. 

The market allows it?   Yep . . . you got it!  The beautiful thing about capitalism, for all its faults and shortcomings, is that the market is efficient enough to move on past bad businesses.  It's the beauty of the system . . . if you aren't good at what you do then you aren't going to be rare and valuable in the market, and the market won't pay for your business.  Eventually this renders the business . . . not a business.

• "My cousin is an agent."
• "My neighbor is a broker."
• "I go to church with X"
• "There is an agent at mosque with me that said he'll do Y for me if I use him"
• "My mom's best friend is an agent"

As long as the above is THE primary line of reasoning in agent selection the status quo will prevail.  As long as we think primarily about the Thanksgiving table more than the Closing table we will only by luck receive excellent agency.  It will be against the odds.  And short of changing your family and friend groups, there's nothing you can do to change these stars.

What do you mean "against the odds?"

The Pareto Principle (80/20 rule, etc) is a now well-established idea that a small group produces the bulk of results in various industries -- from pea farms to financial advisory services the uneven distribution of results rings true, though the ratio skews from 80/20 quite a bit. 

How does that look in real estate?  Well, in my home market around 5% of the agents account for 96% of the transactions*  So . . . we'll call it the 96/5 rule.

If your primary line of reasoning (remember, my aunt, my cousin, my mate from school, my buddy at temple, my grandma's stitching buddy, etc) leads you to a social obligation to an agent in that 5% then you are SET!  (probably . . . still check to see that they are masters of their craft and aren't simply a member of the right country club)  If, however, your primary obligation lies with the other 95% (much more likely) then you're going to dealing with one of the "95 percenters" who slog it out for the remaining 4% of the reps.  

When the market stops supporting fluff agents then the fluff agents will stop telling their "tales of success" around the water cooler and propagating the fallacy that getting your license and helping 1-3 people a year buy a home is a good fiduciary rending of agency.  Yet, we keep allowing these agents to act like Gofers and earn like Consultants, so the stories keep being told/sold at the water cooler and fluff agent after fluff agent enters the market place.

So, if you want this to change for yourself, simply look to align yourself with an agent who is a craftsman, a master of their trade, and a learner.  That will give you a statistically MASSIVE leg up.  If you want to change this for others?  Well, that's a great puzzle!  Tell the good stories as often as the bad?  Is that even biologically possible?

*Sample year of 2017