Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

Listen to this blog entry by clicking the play button above.
You can also click the podcast icon to listen in your default mp3 player.

In the news today, the real estate market soared as buyers finally concluded that the prices of houses on the market accurately reflected their needs and desires, plus their ability to pay, given the broader conditions of the American economy. When asked how quickly they might begin making offers on current inventory, John Q. Public, spokesman for the Common Real Estate Buyer (CREB) said, “Looks like we’ll see a lot of offers being made this month, now that REALTORS have stopped trying to get our members to pay too much for their next home. Looks like the managers in most offices have finally started taking control of their companies and rejecting overpriced listing agreements from their agents.”

John Q. Public added, “The average property in America has been overpriced by 10-15% for about two years now in most markets. Most of our members were just sitting on the sidelines waiting for the real estate industry to help its sellers come to their senses. In the meantime, we’ve been snapping up the For-Sale-By-Owner properties on the market, which have been more reasonably priced.”

On the other side of the situation, Amm Smart, speaking on behalf of the Society of Sensible Managers and Brokers, (SSMB), said her members could point to one specific factor that had helped the marketplace return to its senses. “It looks like it finally happened, after quite a long time. Brokers and managers around the country finally stood up and started rejecting overpriced listing agreements their agents were bringing home.” The impact, she added, was dramatic, as existing sellers already in the market were also forced into repricing their homes according to market realities, or pulling out of the marketplace. “Not only are homes selling faster, but we’re seeing agents getting commissions on properties they otherwise would have sat on for months, maybe years, at unrealistic prices.”

Stand. D. Upp, current President of the Society of Sensible Managers and Brokers (SSMB) said that his members had decided that enough was enough. “It was simply not possible  to keep accepting overpriced listings from agents who refused to properly counsel sellers. Our broker-members were going broke footing the bill for months of advertising costs on properties that would have sold in days had they simply been priced according to the buyers’ perspectives. We have even had reports of some of our Managers canceling current listing agreements because, after talking to their sellers, they determined that it was impossible to sell their home. It’s like trying to sell a Bear Stearns stock certificate today for $60, when the buyers out there won’t give you $2 for it. Our managers just finally got it.”

Not all of the agents are happy about the sudden surge of leadership amongst the managers of the industry. In fact, the return to authority and sensibility demanded by some of the brokers has caused a lot of agents to leave their companies. Spokesman for the Agents of America, Weira Buncha Wimps said, “It’s really shocking that after all these years our managers are suddenly holding us accountable. We won’t stand for it. They expect us to be able to walk away from sellers who don’t understand the marketplace. We’re people-persons, not economists. If the MLS comps say everyone else is overpricing it, why shouldn’t we?” Some agents have decided to simply throw in the towel, while others are going off on their own, claiming they can do a better job without their managers telling them that, “The customer is in charge. Really? Whose picture is on the website. Mine! Don’t tell us the customer makes the decisions. We’ve been running this business for decades; who cares if we’re running it into the ground? We’re independent contractors, you know!”

Even MLS systems aren’t happy with the new managers’ attitudes. Brokers who are asserting their right to run their companies according to their own rules, “pose a significant challenge to our control over their profitability,” says Lon’g Ter’M Car’tel, the Chairman of the Minimum Listing Services Oligarchy (MLSO). “Managers who start telling their agents to price property properly are just one step away from realizing that the way they market their inventory has been just as broken for years. Our MLS oligarchs are worried that brokers and managers will turn their sights on us next, and figure out that our rules have been limiting their ability to use photos, videos and data feeds to leverage the internet to market their homes.” For years, the MLSO has encouraged its fiefdoms to keep brokers under control, mostly by ignoring their requests for features that can be found on free websites like Yahoo or YouTube. “We’ve tried everything from raising fees to periodic outages to keep the managers from expecting too much from their MLS systems. If they stop being distracted by overpricing and poor data entry by their agents, they’re quickly going to decide that the costs of most MLS systems are exorbitant compared to their company’s existing websites. And they might even decide that all of the rules and penalty fees we have encouraged them to put into place have become overly restrictive – considering most do-it-yourself-sellers don’t have the limitations we put on the average REALTOR.”

The resurgence of manager’s authority over the terms of production in their offices even has some trade associations worried. If brokers suddenly start expecting more from their agents, and either holding them accountable or firing them, it could pose a challenge to a trade association system which depends upon low-skilled workers constantly turning over. “We need the average member to quit every year and a half, so new members can come in and generate new dues,” says Yougotta B. Kiddinmee, President of the Society of Truly Underskilled Practitioners’ Delegation (STUPD). “For years, brokers and managers have recruited our members without ever expecting them to have the skills required to do the job right. If, suddenly, managers expect their subcontractors to actually have the skills to study the consumer, determine their current desires, price property correctly and market it in a way that actually works, then we’re going to have a lot of attrition in the industry.” When asked if her members might be able to build the skills necessary to meet managers’ new expectations, Kiddinmee said, “It’s not likely. Most of our members really don’t have the aptitude for sales. They were schoolteachers, computer programmers and auto workers who were laid off, and could get their license by attending a quick class and paying a hundred bucks or so. In the past, that’s all that brokers wanted: warm bodies to answer the phone and drive buyers around all day. Once managers start demanding more and setting some higher standards of performance, it’s not likely our average member will put in the time and money needed to learn how to do it.” Kiddinmee referred to a recent study that showed that the average practitioner spent less than $500 last year attending continuing education or technolohy training. “Unless it’s the minimum requirements of the law, most of our members don’t see any reason to learn something new,” she added.

Consumers, of course, are still hopeful about the recent developments in real estate management. “We are so excited that someone is finally listening to us,” says John Q. Public. “For years, our seller members were really worried that their house would sit on the market for months because the agent only knew how to run newspaper ads, which no buyers look at any more. And our buyer members were constantly complaining that they only had a 1 in 10 chance of getting a highly trained agent to represent them if they walked into a brokerage office. Most of the other agents were either just recruited or had not done a deal in months; buyers were afraid they’d end up with them and still have to do most of the work themselves.” Public quoted a recent survey that said about 35% of his members actually found the home they purchased on their own last year, “because even if we email an agent on the internet, it takes them about three days on average to get back to us.” Public said most consumers had very little confidence left in the brokerage industry, “until today, that is. Once we heard that brokers and managers were going to take control of their offices again, we were jumping for joy. We want to trust their brands and have a sense of confidence in their services. If managers are going to start setting standards of performance for their agents, especially in the area of pricing listings correctly, our members are going to start coming back to the marketplace and making offers.”