May 2007 Archives

I recently had time to surf around the Internet and came upon this terrific article regarding the top five real estate myths, that even some agents believe, from a well respected real estate publisher and investor, as well as a friend of mine, Rennie Gabriel of Gabriel Publications.

This article originated from Parade Magazine, an insert into many major newspapers. Rennie's comments are in response to the misinformation that abounds in that article, which, for the most part, I wholeheartedly agree with him on.

One of the ACRE® Grads on our Graduate Coaching Exchange recently posted the following: "I have been talking up this whole consulting idea within my office and the other agents are so critical, suggesting that I am advocating limited service brokerage. And while I am saying no way, I am having trouble defending my position. HELP!"

My colleague and good friend Allyson Hoffman, like many of us, was dismayed by the incredible slant and half-truths that filled this past Sunday's 60 minutes segment Chipping Away At Realtors' Six Percent. But, in her blog, she focused on something that I also believe needs some clarification - the issue of the minimum service requirements that some states, including Ally's home state of Illinois, require. There was so much misinformation and lack of full reporting in this story that I could easily blog on different aspects for weeks, but like Ally, I would like to focus on the concept of minimum service requirements.

A couple of days ago in an article for Inman News entitled "Realtor® Ranks Swell but their Pocketbooks Don't", Glen Roberts reported what we agents already knew: that despite the huge increase in housing prices over the last ten years with the accompanying public perception that agents are making gobs of money, the truth is quite different.

In actuality, Realtor®'s median income was down 3.2% in 2006 compared to 2004, while their 2004 median income had dropped 5.6% from 2002. Roberts quoted Chang-Tai Hsieh, an associate professor of economics at University of California, Berkeley, who said that the median-income drop for Realtors®

"is clearly driven by the fact that there has been excessive entry in the last two years. You would expect to see some exit in the near future, but as soon as housing prices pick up we're going to see more entry and then that's going to drive down (income)."

If the only thing we change about our business is implementing a different way to charge clients for real estate and real estate related services we have missed the point. You just become another real estate agent with a different business model. So, lets take a look at what "consulting" and "consultant" really means: