No, I am not referring to the classic “show me the money” scene from the movie Jerry Maguire – but rather, I’m talking about the mission statement where Tom Cruise’s character, an emerging agent for Sports Management International (SMI) abruptly leaves his company. After experiencing a life-altering epiphany about his business, he pursues a new purpose where integrity and client needs become the primary focus of his work.
Why is the real estate industry in need? It is because for better or worse, every profession carries a certain stereotype and ours is far from exempt. This became abundantly clear to me during a social event I recently attended in my neighborhood. In the process of meeting a new group of people, we covered the typical introductory topics, including our professions. Upon mentioning what I do, the person on my right responded in a somewhat condescending tone, “Oh, you’re a realtor.” It was clear he assigned little regard for the career.
However, as the conversation continued, I began to see our work through his viewpoint. According to him, we assist business owners, investors and families, making multi-million-dollar decisions with somewhat limited educational requirements — and while specialization is practiced by many, it is not mandatory.
Despite this individual’s negative perception, I am extremely proud of the extensive services that I and so many others provide to our clients. Not everyone has the right attitude, skill set, or attributes to succeed as a real estate professional — something many novices quickly discover. Negotiating real estate deals is a complex business that requires localized knowledge and expertise. With this in mind, how can we as a collective group change the negative perception many people have of real estate brokerage?
Start with Public Education
Real estate is not just about hanging signs and executing contracts, but the typical layperson often mistakenly understates what we do. It’s our responsibility to educate people about the extensive work that occurs behind the scenes – uncovering the right opportunities, knowing how market conditions can affect our client’s, touring properties and handling offers. We strategize on marketing, help clients understand and leverage better contract terms, even finding ways to make a tenuous deal happen.
We collaborate with highly educated people who possess specialized knowledge every day: attorneys, city planners, architects, contractors, developers, lenders, and asset managers. We are often the link that brings them together and translates the “can-do” and “can’t do” of each party. Often, a transaction wouldn’t be possible without our initial vision and ability to bring together the right parties to move things forward from an idea to reality. Let’s also not lose sight of the fact that most participants are paid along the way, regardless if the transaction closes – in the brokerage world, we are speculators and only see payment at the successful conclusion of a deal.
Increase our Own Standards
If we ultimately want to change perceptions, increased experience and educational requirements is a logical place to start. A series of weekend courses and a 150 question, multiple choice exam isn’t sufficient enough to become a real estate agent, but more importantly, serve the needs of a client. Currently, 70% (a C-) is a passing score in California for a sales agent.
Taking our profession to a higher level can’t start without a serious discussion surrounding changing the barriers to entry. This could come in varying forms but to start, what about separate licensing for residential and commercial real estate agents? Each division has specialized knowledge. Residential agents aren’t discussing a single-family homes cap rate or NOI, and commercial agents certainly don’t have the specialized skills and knowledge that residential agents bring to the sale of a home ranging from architectural design, knowing the neighborhood, school systems, and inner workings of HOA’s to name only a few.
Clients need to feel comfortable that their agent has more than just a basic knowledge in the appropriate areas. Fortunately, there are opportunities for extended certification and distinction through organizations like SIOR, CCIM, and NAR to prove to our clients we are leaders in our field. However, these are not requirements.
Mentorship & Continual Development
We must mentor the next generation on character and continual development. New real estate agents need to understand this is not a get-rich-quick occupation. It requires sacrifice, passion, and hard work. People place tremendous trust in our advice when they are making significant financial decisions. No real estate venture is without risk, but the quality of our counsel and its impact on a deal can’t be overstated.
It’s also of critical importance we never stop learning. Right now, there is a period of massive change occurring in the real estate industry. New technological advances are altering how we prospect, share information, list, and market properties. Our workflow is becoming more efficient and as a direct result, speeding up the pace of how we complete deals. Staying in front of these trends requires a mindset and focus on continual improvement.
Ultimately our work, when done with excellence will continue to be vital to clients through providing valuable knowledge, insight and successful outcomes that technology can’t deliver.
However, it is up to all of us to represent our profession with the integrity it deserves. Education, both for the public and inside our own ranks, along with increased standards, can go a long way to changing perceptions.
Looking ahead, with the right changes, information and sustained effort, we can debunk the negative stereotypes surrounding our industry – but it ultimately starts from within and establishing higher expectations.