When will we start listening to the consumer?

Almost 20 years ago, a Broker I worked with hired a big name trainer to come to our office and teach us how to "sell" people using demanding scripts. We were taught not to give the consumer any information about the house until you get their name, address, mortgage info, blood type, first born child, etc. We were taught to focus on the sale, rather than helping someone, finding what their needs are and getting them where they wanted to be.

I didn't like those tactics back then and I don't now. The consumer doesn't either, so why do we continue to go back to the old, tired "basics", that are so out of touch with today's reality? Nobody likes to feel sold to; they want to be listened to and given help in making an informed decision that makes them feel comfortable and smart. I find it odd that many trainers today are still espousing that agents do things the same way that didn't work all that well years ago. It reminds me of the saying "Lunacy is doing the same thing but expecting different results".

Think about how our world has changed: fifteen years ago, people largely had answering machines so they wouldn't miss a call. Today, people have been so inundated with sales calls that they now have answering machines (and voice mail) to screen their calls. Fifteen years ago, many people still looked forward to getting the day's mail. Today, most consumers sort their mail over the garbage can and anything that isn't personal or a bill is dropped unceremoniously into it. But isn't mailing hundreds of nice printed pieces to a neighborhood of strangers (as well as door knocking, and calling at dinner time) the "basics" we are being coached to go back to? Get back to basics? Really?

Maybe instead of listening to these training "pundits", many of whom haven't practiced real estate in years, if at all, we need to start listening to the consumer. I know that this is a novel thought, but history is replete with examples of businesses, and entire industries that failed to listen to what the consumer wanted and woke up one day to find that they didn't have a business anymore.

We now have the Internet, where over 80% of consumers start their search for a house online. These Internet-savvy consumers want to stay anonymous until they are ready to for an agent. They will NOT give out their name, phone number or email because they know how that game works. What they want is information - plain and simple, and when they are ready to move forward, and the agent has given them what they want, the way the want it, then that agent will be the one that will get their business.

In developing the ACRE™ (Accredited Consultant in Real Estate) Course and Coaching Program, my colleagues and I, collectively, have talked to hundreds of real estate consumers over the last couple of years and it is very clear that today's Internet-empowered consumer has three major needs. NONE are addressed by the "get-back-to-basics" one-size-doesn't fit all service package, payable only by commission. And, interestingly enough, despite what we hear in the popular press, none of these needs revolve around "getting the cheapest deal".

1. CHOICES: Today's consumer is saying loud and clear that they want quality choices in the services they can obtain and how they can pay for them. They are tired of gimmicks - aren't we all? Do you like to be treated that way when you have the need to buy a product? What the consumer today wants is education and clear options that give them real value for their money and address their needs without hyperbole or used car tactics of yesterday. By the way: not all of their needs involve a transaction - sometimes they simply want counsel regarding a move-versus-improve decision, a tax bill that seems to high, or a decision as to whether to refinance. These needs are not met by the one-size-doesn't-fit-all service package, payable only by commission. Think about the millions of dollars that, as an industry, we could have earned over the years had we simply offered some options such as charging a flat fee or an hourly rate for our time.

Yet, most agents still continue to try to force the square peg into round holes. The best case in point: For Sale by Owners. Yes, they have been around forever and we can sit smugly in the knowledge that historically, most end up listing with an agent. But technology is rapidly changing the landscape: on-line portals that compete with the MLS are popping up almost daily, putting the consumer's home in front of the eyeballs of increasing numbers of potential buyers. Using these tools, sellers are already locating buyers without (gulp!) the aid of a real estate professional.

But, wait a minute! Just because they found their own (potential) buyer, does that mean the seller doesn't need professional advice? Hardly - this is when they need us the most! Yet, in this scenario, the consumer is often forced to go it alone, or hire an attorney. (The difference between paying a consultant versus an attorney is important to note. An attorney knows the law BUT they don't know the market like we do, so how, in negotiating a transaction would they know what can be given on and what should be a deal breaker? They also don't typically work nights or weekends if necessary. Buyer's remorse kicks in three nano-seconds later, so it's real important to have someone that can overcome this, and I've never seen an attorney that can do that.)

If an agent could simply charge the consumer a fair hourly rate or flat fee for the time worked, as real estate consultants can do very well if trained correctly, they could earn more income for their knowledge and expertise and the consumer would be far better served. It's a win-win for everyone. Wow - what a novel idea!!

Sometimes a consumer has no desire to play Realtor® and wants full service, but wants to pay for services themselves rather than a contingent commission. Interestingly, the experience of our consultants points to the fact that many consumers, when given choices of what services they can obtain and how they can pay for them, WILL choose a traditional full service package and pay by commission, but they want to choose it because it's the best option, not because it's the only option. Today's Internet-Savvy consumer is looking for choices, truthful, unbiased advice, and education. If we fail to provide that to them, they will not be forced into doing it our way, they will simply seek what they want elsewhere.

2. TRANSPARENCY: The vast majority of consumers appreciate what a good real estate professional brings to the table and have no problem with paying for quality real estate services, if only they could just make sense of what they are paying for. My colleague, Merv Forney, sums it up in one word: transparency. The average consumer has never understood how commissions work because we, as an industry, keep trying to equate commissions with payment for services and time. In reality, paying by commission has nothing to do with compensating an agent for time and services. Commissions are all about mitigating risk. It's time that the real estate industry understands this concept and communicates it to the consumer. Then they can choose whether they want to pay for time and services received or pay a premium to have the risk borne by the agent.

3. OBJECTIVE COUNSEL: The consumer also wants someone they can trust - someone who won't make a recommendation just to make a 'sale'. They will pay for unbiased, trustworthy counsel and they see the value in that.

In her book "Ripping the Roof off Real Estate", my colleague, Mollie Wasserman, makes the statement that "our industry is in the midst of an identity crisis because agents are being asked to fill roles that are in conflict, especially in the mind of the consumer."

As Mollie says: "no matter how it's presented or dressed up, there is an inherent conflict of interest when an agent is expected to act as a fiduciary agent providing objective, unbiased counsel to clients, while at the same time being paid by percentage of the sales price. This unspoken reality, combined with a lack of choices in the real estate services offered and how they can be paid for, is the elephant in the room. The real estate industry knows it's there because the consumer keeps pointing to it, but no one wants to acknowledge it and certainly no one wants to talk about it."

Bottom line? Today's consumer doesn't want to be sold to. Nor do they need to pay a practitioner to provide them information - in the age of the Internet; getting access to data is not the problem. What they desperately need is someone who can make sense of what that data means. And no matter how much we argue to the contrary, the public just doesn't buy that an agent can objectively advise them on their options when the amount of their compensation (or whether they get paid at all) is wholly dependent on the decision that they make that the agent is advising them on.