Susan Stellin wrote an article in Sunday’s New York Times that is sure to rustle some feathers. The article discusses the commission model and negotiability of this (or not) in the current environment.
My feathers aren’t rustled, but I am certainly bewildered at the lack of collective insight about how this business and the expectation of clients has evolved, both by the Stellin, and by some of the people that she quotes.
My favorite: “At a certain price point, 6 percent just feels vulgar.”
I am never nauseous when I pay top dollar at the Apple Store for an iPad or an iPod Touch. Apple’s seamless service and their product innovation is worth every penny – to me!
Sure, I might be able to get a similar product for cheaper, but that’s not the product or experience I’m interested in.
I am never upset when I pay FedEx to ship a package to me when I want it. Their reliability, their tracking mechanisms and their ease of use is worth every penny – to me!
Sure, I can use another carrier to ship it more inexpensively, but will I get the package, in one piece, on time, every time?
My money manager at the hedge fund charges me a higher fee than the online mass-market trader online. His knowledge, insight and the strategy I get, along with personal service, is worth every penny (and seen in my ROI).
It is DIFFICULT to find high-level service.
This takes time, effort, attention to detail, expertise and money in order to create it.
Companies who offer high level service are rare, but are usually worth every penny.
It is EASY to get things for cheap these days.
Anyone can deliver that! (And it seems that everyone is trying to).
Discount companies with mass-market appeal have their place.
But it isn’t always wise to be penny wise and pound-foolish.
When it comes to buying or selling a home, I would imagine that it is smarter to work with innovative experts who are knowledgeable and who deliver high touch service and results.
After all, a home is probably the largest purchase or sale you are going to deal with for a while.
Wouldn’t it be wise to use the best – not the cheapest?
I certainly think so!
Disclaimer: I am not an architect.
A GREAT architect is both artist and craftsman.
Art is subjective.
Craftsmanship is not.
An artist’s calling is to express, evoke and innovate.
A craftsman’s (or artisan’s) is to design, and to create form and function.
It is rare to find one who can combine both effectively.
The great architects that I have worked with that manage to combine both effectively leave their egos at the door. Their agenda is not to create a personal expression, but rather to achieve the highest level of design, form and function for the end user. They have a deep respect for history, but their work is current. Ironically, by successfully achieving this, they create intrinsic value that is a fingerprint of their work.
The attribute I respect most in a great architect is their ability to design from the inside out. Residential buildings need to be livable. There are too many buildings constructed that have a deceptive exterior and a disconnected interior. These buildings may have a definitive facade, but the interiors offer homes with layouts that are incongruous.
How does this happen?
All too often, the merits of an architect are based on successful self-branding and business acumen – not artisan artistry!
It isn’t difficult to tell the difference between an innovator and an imitator.
Innovators take risks. They have talent and skill. They expose themselves to criticism, and to failure. This is why innovation is a rarity.
Imitators, on the other hand, are lazy and risk averse. They prefer to let the innovators blaze a trail and lead the way. They swoop in on the innovator’s coattails and try to benefit. The problem with imitators is that they get lost in the smoke and are always behind the curve.
What separates the two?
Fear of failure is debilitating, but once you overcome it, the opportunity to create and innovate becomes that much greater.
I admire anyone who takes a risk – even if they fail. It seems that many people in our industry love to criticize the entrepreneurial spirit, especially when the result is a failure.
When I left my previous company to start CORE, it was a huge risk for me.
Professionally and personally.
But that’s what made it exciting, and that’s what has allowed me to push the envelope. There is no other choice.
I feel very fortunate to still be here, especially after the last downturn in the market. Others were not that fortunate, but I still commend their efforts, spirit and innovation.
Even if they are out of business.
Even if they were criticized for their efforts.
More so than the imitators who hung around and took the easy road.
Michele Kleier of Gumley Haft Kleier has been a staple of the New York City brokerage community for almost three decades. She is well-known and respected amongst her peers in the industry. I have the pleasure of working with her on HGTV’s show Selling New York, and recently sat down with her to discuss a few different topics related to her real estate world.
Real estate brokers have the reputation of being elusive.
With their buyers, with their sellers and generally with their clients.
A rogue economist might rationalize this behavior by saying that agents have an incentive to conduct themselves and their business in this manner. I say no! It is counterintuitive. I argue that agents have the incentive to be transparent, build a reputation of accessibility and be a conduit for free flowing information. In their bestselling book Freakonomics, Levitt and Dubner compare real estate agents to the Ku Klux Klan. A little excessive, but they certainly got my attention and made a point to the millions of readers who made this book a national bestseller! (Thanks for helping our reputation, Fellas).
What I don’t understand is why some real estate agents (in this day and age) still have the incentive to be elusive to one another. This behavior breeds contempt within the industry and within a company, and is toxic. This is why we are strong proponents of a team mentality and maintain a strong culture of transparency within our company. The power of sharing that leads to personal and professional growth is inspiring.
I’ve observed two schools of thought in the industry:
Old School and New School.
- Old School believes that information is power that should be safeguarded. New School knows that information is everywhere and easily accessible to all.
- Old School believes that protocol and hierarchy create strength. New School knows that a layer-less environment creates free flowing ideas which lead to growth.
- Old School believes that business-as-usual in a historically successful company is a formula for success. New School knows that change is a constant and a requirement for success.
- Old School believes that ideas and leads are owned and controlled. New School knows that the collaboration of ideas create growth which leads to innovation.
- Old School thrives on a culture of privacy. New School thrives on a culture of transparency.
I have discovered that New School and Old School philosophies are not defined by age, past success or failure. They are defined by vision, culture and common sense. They are a part of the DNA that makes up an individual and company at its CORE!
Recently, there has been a surge of new real estate brokerage companies opening in the city. Exciting times indeed! The major disappointment for me is their common goal of aiming to become “the biggest in the business”. I wonder if it is the hope of a future merger or an acquisition that drives this direction.
Once again, I seem to be the contrarian and subscribe to Seth Godin’s prescribed business model. When I spoke to Barbara Corcoran a few years ago, she alluded to the fact that the future of real estate belongs to the boutique firms – ironic, indeed.
Through my eyes, the real estate business is qualitative, not quantitative.
More is less.
Less is more.
Small is powerful, innovative and creative.
Big is predictable, clumsy and inconsistent.
When our clients want something, we like to react – quickly!
It is far easier for us to act and adapt swiftly because we are unencumbered by a heavy load. An obstacle course is easier to navigate if you are nimble – 10,000 Pound Gorillas are heavy and can’t maneuver that easily.
History has shown that layers create bureaucracies, which in turn become inefficient. This makes everything political and hierarchal. When I want service, I don’t want to wait for a directive to trickle down from the top, watered down and filtered by other people not connected to the root. I like to speak to and get a response directly from the source because it is quicker, and more accurate.
The world keeps moving faster and we are living in the “now” generation. To be big and slow is risky and today’s consumer shouldn’t have to tolerate these inefficiencies. We should be able to deliver what you want, when you want it – and create innovative mechanisms to achieve your requests “now”.
David brought down Goliath with simple innovation, speed and the accuracy that his size afforded him.