I was handed this — a bag of candy with the word "smile" on it — by a teller at my Washington Mutual branch last Thursday. We both recognized the absurdity of the gesture. The bank, and her job, teetered on the brink of oblivion. That night, they fell in.
Smile my ass.
I felt bad for her. I feel bad for a lot of people.
And angry too.
At her bosses, who peddled stupid loan products to keep the good times rolling at all costs. They knew better.
At the people who gobbled these loans up, smothering common sense in a soft blanket of aspiration. They knew better.
At the bad-apple mortgage brokers and Realtors who took the smack cooked up in the executive suites and pushed it carelessly. They too knew better.
At myself, for offering $200,000 over asking on my Oakland home in 2005. Damn, I knew better.
I won’t pretend to understand the complexities of our financial markets. And there’s something so large about this calamity, so shameful, so tangled with failures both moral and financial, that I want to simply tune out.
But the Raven at the door persists. It’s not going away.
With what are we left then besides recriminations and diminished hopes for a healthy housing market?
Well, I think back to a something my business partner Marc Davison wrote last summer during the first credit shock:
The love is what comes next. The good stuff that’s already starting to emerge despite the news. It will come by way of an unspoken apology of change. The love will bring about an industry that’s transparent. True. Simple. Real. Honest. Social. And smaller.
An "unspoken apology of change." It’s an interesting phrase. No one in this industry who kept their moral compass pointing true during the bubble needs to apologize. But we’re dealing with broad brush strokes. There’s not a lot of good will toward the real estate industry these days and you’re probably feeling the blowback.
So change. Break the mold. Don’t play the part.
How?
I recently spent several days examining seven hundred broker websites for a study we’re conducting. Dozens upon dozens of them had versions of NAR’s "Now’s a great time to buy" gloss plastered on their home page.
Stop doing that. Even if it’s true in your market, consumers aren’t buying it. It’s hurting you, not helping.
Instead, take the real market knowledge that lies inside your organization and expose it, share it, offer it up. That’s what all this social media stuff is about, right? The tools are there. Your CEO — she was around in ’91 and lived to tell about it. Where’s her candid perspective? That office manager who knows every square foot of your market — offer what he knows to the public, not echoes of a tin-eared NAR ad blitz.
Or reach out to those set reeling by the housing crisis. Many brokerages make philanthropy a priority. Real estate rose to aid homeowners displaced by hurricane Katrina. This industry has a big heart. Now’s the time to show it. If you are in a market hit hard by foreclosures, establish foreclosure assistance office hours (put those cubicles to use!) and put the knowledge inside your organization to work – no pressure, no questions.
Don’t like these ideas? Come up with your own. The American public is ready for, and will reward, something new from real estate, a voice that speaks in moderate tones, honestly, and with mastery. And delivers an experience true to the words.
Whatever you do will be better than candy.
– Brian Boero
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Right on, Brian!
The public is exhausted by the industry "marketing -speak" about "Last of its Kind" or "Hurry, won't last at this Price" and the word "fabulous" which who knows what it means anymore?
Honesty, transparency, integrity and dignity in situations of moral hazard is what's called for in the new market.
Michael Daly
True North Realty Associates
Sag Harbor, New York
Bravo! well said Brian
You're right! There's not a lot of "love" for real estate agents these days. However, we have to keep the faith, and remain honest with our clients and have integrity. Being honest and forthright about information with our clients is one thing. Educating our clients about how to "buy" or "sell" in this market will ultimately result in success for all agents on board.
You're absolutely right about the marketing message, or should I say, the spin that NAR presents. We constantly heard the rhetoric from NAR economists despite ample evidence that many housing markets were crumbling. As you mentioned, NAR still seems to be in denial about the reality of the situation.
Add that to the latest and greatest NAR ad campaign encouraging Realtors to wear their pin to become a client magnet. Is there really and 99% chance that a passerby will notice a pin on the lapel of a Realtor who is pumping his gas? Even if the exaggeration was supposed to be obvious, it is ridiculous to suggest that a consumer will entrust someone with selling their largest investment on the basis of a pin.
Just two instances (there are many more) showing how out of touch NAR really is (to the point of insulting everyone's intelligence) in their marketing to Realtors and consumers. As Brian suggests, let's get real please.
I think the business model for Realtors and Mortgage Brokers has to change: Sell a lot, make a lot, sell a little, make a little. Straight Commission is no risk for Agency Managers: slackers – low producers make little. Its not 80 – 20, its more like 92 – 8. 8% make 92% of the income.
What if you could truly "consult" with a home seller for an hourly fee, and bill them? Like an accountant or attorney or web designer?
What if the only solution is a Lease option? Seller Carrying a Second? Installment Sale? These solutions in a crawling market are not taught by RE Brokers – THERE'S NO MONEY IT IT FOR COMMISSION! But it creates a solution for the home seller.
Buyers – well it is stupid right now to apply for a mortgage without low consumer debt, 20% down, and 2 yr + employment.
Agents should read Patrick Rice's book on IRA Wealth to understand how parents and grandparents and uncles and aunties can help young people get into a home by using their Traditional and Roth IRA money (Private 1st Mortgages).
An IRA, as an entity, can borrow up to 70% LTV on an investment property (non-recourse financing). The beneficiary can not enjoy it PERSONALLY, but can lease option the property to a non-related party.
Since 1986, I have taught Real Estate Investing.
This will be a Seller Financing World, where only a few will get financing through banks and mortgage brokers (if that industry survives!).
Agents need to understand Creative Financing to help the seller help the buyer buy.
Best Regards,
Brian Gibbons, Owner, http://REISkills.com
Teaching Real Estate Investors since 1986
You're right! There's not a lot of "love" for real estate agents these days. However, we have to keep the faith, and remain honest with our clients and have integrity. Being honest and forthright about information with our clients is one thing. Educating our clients about how to "buy" or "sell" in this market will ultimately result in success for all agents on board.