If you think it’s hard to sell real estate in America today, take a lesson from the Continent. After spending four days with the Leading Real Estate Companies of the World in Rome, it’s become pretty clear that most American real estate agents have it “too easy.” Just try running your business when selling homes with “verbal commitments that are binding but broken without cause or recourse” and “you have six months to close” is the norm.
It’s about time American REALTORS figured out just how good they really have it.
Yeah, yeah, so the market is soft. So credit is “restricted.” So you have a bunch of listings that are overpriced. Look, at some point, you’re going to face a simple choice: Start taking advantage of the systems and tools at your disposal to do it right; or decide to move on. Let’s face it. We make real estate much harder than it has to be. As a whole, we are still on track to sell 5 million homes this year, a number which, in 2000, was about the same, and NAR hailed that year as “the best year in real estate in a decade.” And we’re right back to about the same number of agents at that time, with lots of available inventory. The “average” REALTOR still made about $46,000 (and most of those people are really “part time”). The top 10% of the industry made well over $100,000 – and they didn’t need a four-year degree or even a Blackberry. Most agents get tons of services, technology and support thrown at them by their brokers. Training that’s free. Advertising they don’t pay for; and leads they never worked to generate. And what do most brokers get in return: Listings that cannot be sold; online photos that look worse than a highschooler MySpace page and agents whining that the “consumer didn’t email them back right away.”
Gimme a break.
Any time American REALTORS think it’s pretty hard to sell real estate, go try it in Europe. Last week I was honored to be asked to deliver the Keynote address for the Leading Real Estate Companies of the World international symposium. Delivering our “Real Estate, the Next Generation” course to European, Asian and African brokers was an exhilarating challenge – because it forced me to update our research and look at their brokerage industries from the outside in (and sometimes inside out).
What’s clear is this: If American brokers want to beef-up their sales force, they should really start recruiting agents from abroad.
Here’s why: In many countries, making sales is done “the hard way.” No lockboxes. No MLS. No cooperation agreements or compensation offers. We’re talking good, old fashioned sales. Agents show up to their showings. Brokers “assign” customers to agents, who have to actually follow up and work with them. Becoming part of a company is an honor for the agent, not a favor to the broker.
This doesn’t mean that European or Asian brokers don’t have lots of technology at their disposal: On the contrary, their cellular technology and websites make far too many American brokerages look like they’re still paying with rocks and sticks.
Yet a major difference in how things work in so many of these companies is that the focus in on doing your job, developing a relationship, making a sale – with about 1/100th of the support from the “real estate community” that most agents in America take for granted. Some examples include the fact that most brokerages sell their own listings abroad; not like here in America – where upwards of 65% of listings are sold by “the other guy from the other company” who finds the buyer for you. Likewise, data is much harder to come by: Not too many “hotsheets” or broker caravans are done abroad, so the job of marketing listings falls squarely on the agent and the brokerage. No “LinkedIN” or “ActiveRain” or even regional or city-wide listings databases. IDX? Is that some kind of driver’s license system?
Proportionally, agents also have far less protections. In some companies, sellers “list and de-list” their properties daily; listing agreements are “kinda real” in too many places, but mostly “agreements” of understanding. Commissions are certainly far lower – as a matter of percentage – and the average sale can take months just to do the “paperwork”. Some countries have so many “stages” of paperwork that you might think you were re-building the home, not just transferring it.
It’s also clear that international demographics are on the path to making things much harder for many countries to sell real estate. Too many countries have shrinking populations; which means new construction may give way to more renovation, but smaller homes (and therefore smaller prices and commissions) will force brokers to be exactingly efficient and financially sound. And while much has been made about American financial distress in the last few years, taken as a whole, the last half-century has been a real estate boom, underpinned by sound monetary policy and consistent property laws. Just try selling real estate in a country where everytime the coalition government changes, they rewrite the finance, ownership and international trade laws – not to play with monetary policy and taxation rates so whimsically, they virtually wipe out the entire real estate industry every decade or so.
The bottom line is this: American agents should all be far more wildly successful than they average today. Even though I was the teacher at the Symposium, I was also the learner: And the biggest lesson was this: the American real estate industry has so many resources at its disposal – from company tools to internet marketing, local REALTOR Associations to international franchise systems and finance – that companies who can’t get their agents selling, no matter what the market conditions, have far bigger problems than the “credit crunch.” As Shakespeare said, “Something’s wrotten in Denmark.” Perhaps he was talking about the wrong side of the Pond?