Beware of the Elephants

This post arises from a letter I wrote to the facilitator of an excellent seminar I attended in December. On reflection, I thought parts of it might be useful to ACRE® colleagues (or others interested in Consulting) in helping to refine their articulation of the consulting mindset and value proposition.

First, the context. Real professionalism in the practice of real estate brokerage was the subject of the seminar. Bob Wallace, Executive Officer of The Real Estate Board of Greater Vancouver, has presented this material across Canada in a diligent effort to get it on the national agenda. It's evident from selected excerpts that they mean business well beyond the usual platitudes.

"Most definitions of a profession include the following aspects:

The work is applied as a public practice, providing personal service rather than simply the entreprenurial dealing of goods.
There is an independent society which maintains a standard of qualification that attests to the competence of the individual practitioner.
There is a specialized code of conduct enforced by the society designed principally to protect the public.
There is a continual investment made in getting better.

Excellence in client satisfaction is an enforced standard."

"Through public research, we learned that consumers want to hire:

someone they can trust,
someone who provides valuable services relative to the fees paid, and
a professional who provides specialized knowledge and skill."

One great line I can't leave out "...just doing it and getting paid sounds more like prostitution than professionalism."

Now for those who've been wondering where the elephants are, they're contained in what I wrote in response to their request for feedback. Notwithstanding their good intentions the ACRE® side of me felt an urge to let them know something was missing. I share those thoughts here in the hope they may be useful to those who would sharpen their skills in explaining the consulting model:

There is, in my opinion, an elephant in the professionalism space. Actually there are two elephants, a parent and a child. The Parent Elephant is our industry's sales culture. The Child Elephant is commission compensation. If allowed to lumber around unchecked the elephant family will probably trample and crush any progress we make toward professionalism.

Our culture of sales was well established and driven by almost 100 years of momentum when, about 1994 (depending where you practiced), most of the North American real estate brokerage industry adopted Buyer Agency. The replacement of Sub-Agency with Buyer Agency about fifteen years ago was, in my opinion, amandate to stop selling and start representing. We missed an important turn in the road, a teachable moment so to speak. It should have been the beginning of a massive re-engineering of our industry. Instead, having failed to understand the significance of what was taking place, we undertook to fit agency representation to our entrenched sales culture and its concomitant remuneration - sale contingent commission. For example, consider the invented nonsense of Limited Dual Agency, the purpose of which could only be to facilitate double ended commissions.

Today our industry (I wish I could truly say "profession") is a living, breathing dichotomy sworn to act only in the best interests of its clients, but remunerated by a system that rewards acting in self interest. Duh!

REALTORS®, in their initial and on-going education, are thoroughly indoctrinated in agency and its fiduciary framework only to return afterward to an office milieu in which selling reigns supreme. Therein lays the dichotomy. Professionals advise and serve in the client's best interest - salespeople sell!

Given that selling is persuading another to buy something we wish to sell, and that professionalism is, by your definition, the provision of valuable services for a fee, one has to wonder whether there can be such a thing as "professional sales" except in the contemporary use of the term which denotes quality execution and performance of almost any activity.

Regrettably, success in our industry is measured by sales productivity, not by fiduciary integrity. Where MLS® Awards are still practiced, they are the reward of sales success. Qualification for reward trips and other perks are measured by sales. Offices have regular "sales meetings." Our "SOLD" signs hanging on clients' lawns trumpet our supposed sales prowess. Individual marketing material implies that I can sell your property better than another agent can. On and on it goes, ignoring the fact that clients don't need to be sold; they need to receive advocacy and be advised, represented, coached and guided.

Can a sales culture and a culture of true professionalism co-exist? Can the former be re-morphed into the latter? Does the leopard change its spots? Consumers have always seen us as salespeople. Not only have we failed to tell them any different, but, by our conduct we have reinforced their conclusion. Consistent with our sales culture, the dominant form of remuneration is contingent-on-a-sale commission. Commission is the life blood of our existence, a fact also well imprinted in the mind of the public. In that context it is surely laughable that we have the audacity to inform clients that we will place their interests above all others, including our own. Whom do we think we're kidding?

Bringing our industry to a point where it truly does "walk the talk" is no small undertaking. I commend you and your colleagues for the initiative you have begun and hope that I might be able to contribute in some small way as it goes forward.

Ron Stuart, ACRE®

HarbourSide REalty Ltd.

Halifax NS Canada