NAR should promote Realtor Authenticity

Realtor Authenticity
Rules of Authenticity (infographic from MarketingWeek.com “How to be an Authentic Brand”

Several years ago I told you about the National Association of Realtors’ attempt in shifting consumer attitude towards Realtors.  They are pivoting away from selling Realtor integrity, to selling Realtor value.  In 2014, the NAR voted on creating a Code of Excellence to demonstrate competency.  It wasn’t until this past November that the NAR approved a framework of competencies for agents to achieve.  The eagerly anticipated implementation will allow Realtors to assess and grow their skills and knowledge in many aspects of the business of real estate.  But this Commitment to Excellence, as it is named, may help Realtors increase their competency; but in the end, just like being proficient in the Code of Ethics, it will likely fall short in building consumer trust.  The NAR should promote on Realtor authenticity.

Having agents commit to more training is a good idea in building competency among real estate practitioners.  However, research has demonstrated that showing off accolades and awards doesn’t instill value, nor does it increase sales (Valsesia, Nunes, & Ordanini: What Wins Awards Is Not Always What I Buy: How Creative Control Affects Authenticity and Thus Recognition (But Not Liking). Journal of Consumer Research. Apr2016, Vol. 42 Issue 6, p897-914).

Realtors have a trust gap.  And a badge indicating competency and a Commitment to Excellence won’t bridge that gap.  The business of residential real estate is likened to a game of smoke and mirrors.  Instead of encouraging Realtor authenticity, agents are often taught techniques of persuasion to increase sales.  Many agents devise gimmicks and expensive marketing materials to entice you to do business with them.  Even before you meet with a real estate agent, they are likely scheming how to gain your trust.  Whether or not they earn it is an entirely different matter.

Instead of creating another Realtor badge, designation or code, the NAR should consult with James Gilmour and Joseph Pine II (of the Strategic Horizons LLP).  The title of their 2007 groundbreaking book sums it up nicely: “Authenticity: What Consumers Really Want.”  Realtor authenticity is sorely lacking in the industry, and it’s not just the NAR; it stems from the brokers who train real estate agents as well.  In order for Realtors to build trust, they need to be authentic.

A brief 2004 article by Michael Angier (Authenticity Matters: Are you the real McCoy; Sales & Service Excellence Essentials. Vol. 4 Issue 9, p10) highlighted the necessity for authenticity in the sales environment.  He stated that “People like to do business with people they like. And they like people who are like themselves… Buyers today are savvy. They have more choices. And they can tell whether the company and the people in it are congruent. They seek out, resonate with and tend to be loyal to companies that are authentic. Your uniqueness and the things you’re best at doing are part of your differentiating position. It’s who you are—your identity. It’s what people can relate to. If there’s anything false, made up or covered over, your prospects will sense it. And they can’t even tell you why they didn’t buy…”  Realtor authenticity would certainly positively affect client satisfaction.

Realtor authenticity will not only build trust but can also increase sales.  And indeed, a 2006 research article by Allen Schaefer and Charles Pettijohn (The Relevance Of Authenticity In Personal Selling: Is Genuineness An Asset Or Liability? Journal of Marketing Theory & Practice. Vol. 14 Issue 1, p25-35) confirms that authenticity is related to sales performance.  Their results indicated that salespeople who felt more authentic in their roles performed at higher levels and had a higher commitment to “personal selling.”

What do you think?  Below is the framework of the Commitment to Excellence Program as adopted by the NAR is below (from nar.realtor/policy/commitment-to-excellence). It seems to me that Realtors should already be striving to be competent in these areas:

1) Being current and knowledgeable about the laws, regulations and legislation affecting the real estate disciplines the REALTOR® engages in, and about real estate in their community generally.

2) Understanding the Code of Ethics is a living document, and keeping themselves informed about its duties and obligations on an ongoing basis.

3) Providing equal professional services to all consistent with Article 10 of the Code of Ethics.

4) Advocating for property ownership rights in their community, state and nation.

5) Acknowledging and valuing that honesty and integrity are fundamental and essential to REALTORS® being known as consumers’ trusted advisors.

6) Becoming and remaining proficient in the use of technology tools to provide the highest levels of service to clients, customers and the public, and facilitating cooperation by sharing accurate, current information with consumers and with other real estate professionals.

7) Keeping up-to-date on laws and regulations governing data privacy and data security, and taking necessary and appropriate steps to safeguard the privacy and integrity of information entrusted to them.

8) Committing themselves to enhancing their knowledge and skills in the real estate areas of practice they engage in on an ongoing basis.

9) Providing superior customer service.

10) Appreciating that courtesy, timely communication and cooperation are fundamental to facilitating successful real estate transactions, and to building and maintaining an impeccable professional reputation.

11) As a broker-owner or principal of a real estate company, being committed to creating and maintaining an environment that promotes excellent customer service consistent with these standards.

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Realtors giving back

realtors giving back
Giving back (from helpmakemiracles.org)

It was about one month ago when I received the call from a local public relations firm.  The voice on the other end of the line wanted me to write a column about their real estate agent client.  They wanted to draw attention to Realtors giving back, specifically to the fact that their client started a program where they will be donating a portion of their commission to a charity chosen by the home buyer or seller.

Although I was pressured to commit to write the piece as well as provide a publication date, it seemed (at least for the moment) that seeking publicity about one’s altruism was ironic.  In the ensuing weeks, I received follow up calls to write the piece.  But rather than saying “No,” I told them it would most likely be a piece that is generally about real estate agents’ charitability.  After all, we’re headed into the holiday season, and the timing seems right about bringing attention to Realtors giving back.

Not to give the short shrift to the PR firm and their client the Banner Team of Long and Foster, whose “Pay it Forward” initiative was announced in an October 19th press release; the Banner Team will donate a portion of each commission to a charity of their client’s choice.  Although an amount or percentage to be donated was not specified in the press release that I received, they are committing a portion of every commission to charity throughout the year.  The Banner Team’s plan of giving a portion of commission to charity is not their exclusive idea, nor is it a novel one; nonetheless, the Banner Team deserves kudos for the move – welcome to the fold!

It should come as no surprise that real estate and charitable giving goes hand-in-hand.  Nationwide, real estate companies, franchises, and agents have sought to give back to their respective communities.  In 2007, Gerald Leonard, then owner of Coastal Elite Real Estate in San Clemente CA, announced he was pledging 50 percent of all commissions to charity.  And in 2009 Laurie Loew of Give Realty (located in Austin TX) announced giving 25 percent of her commissions to charity.

RE/MAX has supported the Children’s Miracle Network Hospitals through year-round contributions from participating agents.  Since 1992, RE/MAX agents have given an estimated $143 million, as reported by a recent post to the Children’s Hospital Foundation website (childrensnational.org/giving).  Besides individual agent contributions, RE/MAX “also hosts a variety of fundraising events throughout the year.”  Additionally, RE/MAX agents can designate specific homes as “Miracle Homes” – “those homes that have yard signs also indicating the agent’s commitment to improving local pediatric care.”

In addition to agent donations and national fundraising for the Children’s Miracle Network, local RE/MAX offices host fundraising events too.  For example, RE/MAX Centre in Olney MD holds an annual Charity Gala, the tenth one recently raised more than $40,000.  Last year, RE/MAX Gateway in Chantilly VA raised more than $30,000.  And RE/MAX Town Center of Germantown MD holds an annual golf tournament.

Real estate agents don’t only donate money, they get involved; and are recognized by Realtor® Magazine’s Good Neighbor Awards.  The Good Neighbor Awards was launched in 2000 and “has since recognized more than 160 Realtors® for their service to their communities…Good Neighbor charities have received more than $1,000,000 in donations. In addition, each winner receives national and local publicity, which generates additional donations…Realtors® are also recognized for their community service through state and local real estate associations.”

Copyright © Dan Krell

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Home buyers and sellers at risk

home buyers and sellers at risk
“Real Estate Miranda Rights”

I have always found it curious that area agents feel a need to be licensed in three state jurisdictions (Maryland, DC, and Virginia) as if there is never enough business in any one area.  I get the idea that it potentially helps them make more money.  But are they putting home buyers and sellers at risk?

Being a competent real estate agent requires more than just a license.  It also requires more than an understanding of the neighborhood housing market nuances.  A competent agent knows the jurisdiction and local statutory requirements where they are doing business.  They should also be knowledgeable of and use the latest contracts and disclosures.

It’s more than a full time job to be a local expert; following sales trends, knowing the latest home listings, and keeping up with specific statutory requirements. It’s very difficult (maybe almost impossible) to be a local expert in more than one county, let alone three states!  And as more state and local legal, zoning, and disclosure requirements for buyers and sellers become enacted – Home buyers and sellers at risk from incompetent agents.

For example, the statewide requirement of licensees to ensure home improvement contractor referrals are licensed is a consumer protection that many are unaware.  The requirement ensures that consumers can go to the MHIC if the work is faulty and/or there are issues with a licensed contractor.  If your agent unwittingly recommends an unlicensed contractor for home inspection repairs, (besides any potential action against the licensee), a home buyer could demand you make additional repairs and/or obtain certification from a licensed contractor that repairs were completed properly.

And effective October 1st, Maryland is altering its agency law again.  Among the requirements, agents conducting an open house must conspicuously post a notice from the Maryland Real Estate Commission.  The notice (sounding like Miranda Rights) states that any information provided to the open house agent is not considered confidential and buyers are “entitled” to representation.  What would your reaction be if your agent was unaware of this and the buyer is now seeking to void your contract because they were not given their “Real Estate Miranda Rights?”

Recent home seller requirements in Montgomery County are further example where you could be at risk if your agent is unaware of the local statutory requirements and ordinances (such as utility costs and radon test requirements).  Non-compliance and/or non-disclosure could possibly result in a fine.  And of course any future ordinances (such as a sign ban) furthers the risk.  Who knows?  Maybe the County Council will devise a local registry of agents doing business in the county to promote real estate agent competency and protect consumers.

Do yourself a favor and hire a competent real estate agent who is not only aware of sales trends and neighborhood values, but the local practices and regulations as well.

Increasing statewide and local regulation is making local real estate sales a specialized endeavor.  And as a home buyer or seller, you should bear this in mind when hiring real estate agent.  If you’re not being advised properly as a home seller, you’re at risk of non-compliance with statutes, regulations, and/or ordinances – which has potential for fines and a contract dispute.  If you’re not being advised properly as a home buyer, you’re at risk of missing specific local disclosures and notices that could affect you financially and/or physically as a home owner.

Copyright © Dan Krell

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Sign ban or boosting Realtors?

Sign ban or free speech
Sign ban or Free speech? (infographic from newseum.org)

A special thanks to the Montgomery County Council whose proposed sign ban will undoubtedly help local real estate agents.  Last week’s testimony about a zoning text amendment relating to signs and their location illuminated their place in the community as well as reminded us they are a form of free speech.

Of course the unintended consequences of a blanket sign ban in the right of way is yet to be determined.  However, it would certainly make it more difficult for county residents to sell their home by owner (without an agent), as well as home buyers wanting to go it alone without an agent.  The resulting lack of information that is currently provided by these signs would certainly compel consumers to hire a local Realtor®. Thank you.

Greater Capital Area Association of Realtors® (GCAAR) president Peg Mancuso testified: “From a real estate perspective, signs are an inevitable means of communicating with Montgomery County residents both new and existing. The proposed sign ban would be a tremendous inconvenience to community members who are in need of information for short term related events, such as open houses.”  She mentioned a Realtor® best practice (which most agents adhere to) of placement of open house signs just prior to and removal immediately after the event.  She also pointed out that many home owners are unaware how their properties relate to the right of way, as well as being uneducated about the permitting process of signs.  These logistical and educational issues would make such a sign ban difficult for home owners to advertise their homes.

GCAAR vice president and COO Bill Highsmith, Jr reminded those at the hearing that GCAAR not only represents local real estate professionals, but is also a voice for home owners on property rights issues.  He asserted that signs in the right of way have historically been a means of business advertisement, expression, and community engagement.  He stated that “…publically visible signs are an important method of communication for county residents, Realtors® and the broader real estate market.”

Mr. Highsmith stated, “For Realtors® and the clients they serve, these signs are a particularly important way to communicate information about open houses and homes that are for sale.  While you may believe the internet is the primary way folks learn about opportunities to purchase a home, real estate signs are vital to let the broader public know about the real estate market in surrounding neighborhoods.”  He cited anecdotal evidence that many home buyers have bought the home they initially spotted from a sign.  He asserted that many consumers begin the home buying process by visiting open houses (especially first time home buyers).  And additionally suggested that these signs allow more county residents to become home buyers.

Allen Myers of the Maplewood Citizen Association (MCA) stated that these signs are useful to inform their residents of association meetings.  Collection of permitting fees for temporary signs would be cost prohibitive, possibly adding additional financial burden to the members of the association.  He asserted that the MCA believes that the signs are Constitutionally protected form of free speech.

It is reasonable to believe that many people agree seeing “shoe repair” signs are annoying.  And it is also reasonable to surmise that improperly planted signs can become a hazard.  Nonetheless, the takeaway for anyone attending last week’s hearing should be that these signs are beneficial to the community.

Copyright © Dan Krell

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Real estate agent robots

Are real estate agent robots the future of home sales?
Are robot real estate agents the future of home sales? (infographic from techspot.com).

Many erroneously describe Gordon Moore’s prediction as the doubling of computing power every two years.  “Moore’s Law” is more accurately described as the doubling of transistors on a chip every two years.  The point is that computer power is on steep path of improvements; and the prediction has been accurate since Moore’s 1965 paper “Cramming more components onto integrated circuits” (Electronics; April 19, 1965).  What does Moore’s Law have to do with real estate? Everything.  Many industries have benefited as computer processing power increased – including real estate.   Will we see real estate agent robots in the future?

It is often said that a smart phone has thousands more computing power than the Apollo guidance computer.  Consider how far computing power has increased over the last fifty years; common computer processors today exceed 1 billion transistors per chip with average clock speeds over 2.5 GHz (the Mac Plus I had in graduate school had an 8MHz processor with only 68,000 transistors!).  The ever growing processor power has allowed major developments in artificial intelligence (AI) and robotic applications we are witnessing today.  And the promise of quantum computing is expected to make our current computers seem like abacuses. A cutting edge 2013 paper by Carl Benedikt Frey and Michael Osborne, of the University of Oxford, discussed the effects of advancements computerization and robotics on employment and the labor market (The Future of Employment: How susceptible are jobs to computerisation? Oxford Martin School – University of Oxford; September 2013).  The authors concluded that about 47% of the US workforce is at risk of being “automated soon” (which is in the next ten to twenty years).  Workers expected to be affected include, “…transportation and logistics occupations, together with the bulk of office and administrative support workers, and labour in production occupations…” The service industry, including real estate, was singled out as being affected by AI and robotics.  Included among the top occupations most at risk included: real estate broker, real estate agent, property manager, and real estate appraiser. The increasing reliance on automated property valuations by lenders, real estate agents, and consumers is a testament to the advancement of AI in the industry.  Back in April, Inman (a leading real estate information publisher) devised an experiment to see if a computer algorithm would best a real estate broker in choosing homes for potential home buyer.  The results announced May 10th revealed that the computer program did a better job than the real estate agent (Broker vs. bot: And the winner is…; inman.com; May 10, 2016).  Of course, there were limitations to Inman’s test; but still a notable result nonetheless demonstrating how AI is affecting the real estate industry. Robotics is making significant advances too.  Recent developments have made self-driving cars real, along with Honda’s Asimo; and even artificial companions.  You can now purchase your own service robot, if you can afford it.  Just like AI, robots may also take over real estate agent tasks in the near future.  Imagine walking into an open house and being greeting by a friendly and helpful robot! We often talk of how quickly the internet has developed and its impact on the real estate industry.  And it’s partly due to rapidly increasing computer processing power and Moore’s Law.  Imagine how AI and robotics will change home buying and selling in ten or twenty years.  And once quantum computing becomes commonplace, you may even experience a real virtual tour via a holodeck. Copyright © Dan Krell If you like this post, do not copy; instead please: reference the article, like it at facebook or re-tweet. Protected by Copyscape Web Plagiarism Detector Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.