Mon 27 Nov 2006

After attacking the real estate brokerage community’s incentive for working in the seller’s best interest to get the highest possible price, Freakonomics has more fun with NAR by using the NAR blog post Realtor® is to Real Estate Agent as Mercedes® is to Car as a resource.

Irrelevant asides: NAR loves to use the “®” symbol…Did you know Porsche used to make some of the best tractors in the world?

NAR cites the Harris Interactive poll: “Most Prestigious Occupations” which places real estate brokers at the bottom of the list but says the results would have been different if the term “Realtor” had been used in the poll.

Ok, first of all, lets get Real(tor) here:

• Any job with a low barrier to entry, can’t be prestigious by definition.
  
• Who really cares whether their job is prestigious? I would think the primary emphasis is how fulfilling it is and what the potential compensation is (not necessarily in that order).
  
• There has been a rising trend of MBA’s, lawyers and other trained professionals that have been entering the profession thereby raising the bar, but their voice has been drowned out by the 30% surge in NAR membership over the past two years which likely included much of the original sterotypes that resulted in the lower prestige rating.
• Training is a good thing, and being a Realtor is probably better, in terms of professionalism overall, but it by no means guarantees it. It comes down to the individual. Some are, some aren’t just like many professions.

I would speculate that there will be a sharp drop in NAR membership over the next few years that will coincide with the drop in the number of sales that has already occured. The low barrier of entry means a quick response to market conditions.

Many of the half-serious, part time agents will be the first to drop out, leaving the brokerage profession ripe for the new generation, and thats probably something for the public to look forward to.

I suspect real estate appraisers are not that much different than real estate agents in this poll.

My personal goal is to be better than a farmer in the poll rankings.

In other words, be like a farmer out standing in my field.

7 Responses to “Realtor® is to Real Estate Agent as Porsche® is to Tractor”

1. teresa boardman Says:
   November 27th, 2006 at 9:56 am

   Great post! Right on target in every way. I am a NAR member, the biggest benefit is being taught how to use the R.

2. Downtown Pearl Says:
   November 27th, 2006 at 11:23 am

   I’m a broker in Manhattan and have been for several years, and not a member of the NAR. I’ve been helping a Manhattan client look for property in the Catskills and am astounded by the cavalier behavior of the real estate agents there, which by the way are usually members of NAR and consider it a bragging point to be so. My experience has shown only about 10% of the brokers listing a property will return a call to me to show (even in this market). I had one return the call but offer significantly less than 50% of the commission as a co-broke. Brokers who take the listing and one would think best know the property, usually don’t show it. They give you a code to a lock box and the broker who has a buyer shows regardless of their knowledge of the property. I don’t understand how any of this is of benefit to the buyer or especially to the seller. I wonder is this the MO for members of the NAR? A broker wouldn’t last a week in Manhattan with this routine and I can’t think of one Manhattan broker who is a member of the NAR.

3. Sandy Mattingly Says:
   November 27th, 2006 at 4:20 pm

   Downtown Pearl: I am surprised you got the lockbox combination in the Catskills, as I suspect it is a violation of the local Board of Realtors® rules to give that to a non-member. And I wonder how much value a Manhattan agent could be to a buyer up there – unless you have access to all the closed sale data and relevant comps.

   My sense is that the business outside of Manhattan depends on qualified local agents (who are generally members of the local Board) to take buyers to properties without the seller’s agent being present. In those local markets sellers attract enough buyers who are represernted by local agents, I guess.

   If a non-REBNY member wanted to show one of your Manhattan listings to a buyer, wouldn’t you make sure you had an operable cooperation agreement with that agent?? And wouldn’t you be concerned that an agent from the Catskills just might not know enough about Manhattan cooperative apartments to be of much use if your seller would do a transaction with their buyer?

   The list of member firms from the Manhattan Association of Realtors® (yes, there is such a thing) is taken from the MANAR web site. MANAR firms, btw, agree to share closed sale data with each other immediately and have an IDX agreement (permitting my Coldwell Banker Hunt Kennedy listings to show up, for example, on Klara Madlin’s web site).

   Anita Fischer Realty, LLC Argo Corporation, The Barshay Brokerage Real Estate Group, LLC Blue Star Apartments CB Commerical Properties Century 21 NY Metro Charles Rutenberg, LLC City Sites CITYRem Coldwell Banker Hunt Kennedy Curtin Realty Group, Ltd DJK Residential Eychner Associates, Inc. Fenwick Keats Goodstein First Davis Realty FMT International Properties, LLC Harlem Homes, Inc. Helga Forster Realty Janeen S. Jones Real Estate / Joseph W. Grimes Klara Madlin Real Estate Magnum Real Estate Services Margaret R. Hopp, LREB Mark David & Company Montilla 159 Real Estate Nardoni Realty Inc. Netter Real Estate Olshan Realty Inc. On-Site Realty Park Avenue Property Group Pied A Terre Realty LLC RE/MAX At the Battery RE/MAX Atrium Homes RE/MAX Excellence Ready Group Real Estate Group International, Inc. Reliance Realty of Manhattan Rene Martin Oliveras River 2 River Realty Inc. Sheri Speer Struck Realty Turner Home Realty Weichert, Realtors ® – Mazzeo Agency Weichert, Realtors ® – Perry Associates Weichert, Realtors ® – Peters Associates Wohlfarth & Associates, Inc. World Savings

4. Athol Kay Says:
   November 27th, 2006 at 5:11 pm

   LMAO Teresa.

   And really – REALTOR (R) is a Negative Branding not a positive one. I wish it could be removed with soap, water and some hard scrubbing.

   Imagine the laughter if teachers banded together and started calling themselves “TEACHORS (R)” and trotted out a ten page ethics statement.

   I disagree that the appearance of prestige is unimportant though. I want my clients to view me as an expert and a valuable rescource. Not that my alternative career was burger flipping.

5. John K Says:
   November 28th, 2006 at 12:14 am

   Well, I think I read somewhere that real estate agents still rank better than pedophiles, so that’s something …

6. Peter Comitini Says:
   November 28th, 2006 at 7:07 pm

   I used to be a teacher, but now I’m a real estate broker, so do I get to split the difference?

   Levitt and Dubner are great at their particular style of propaganda; which always sounds like market research invoked to justify a position already taken. I wish NAR wasn’t as ham handed at theirs.

   My mentor in the business was famous for saying that no one gets out of college and exclaims “I’m gonna be a real estate agent!”. It’s a place that you get to when you realize that being a teacher or artist may be satisfying and well respected, but a struggle too; and may not underwrite sending your kids to a really good college. Priorities change.

   I do completely agree with your prediction about the rapid attrition rate of opportunistic agents, who are not building sustainable service businesses. That’s good! I’ve always been impressed with the overall professionalism at my company, but I suspect that may not be the case everywhere, as the survey points out.

   There has been a rising trend of MBA’s, lawyers and other trained professionals that have been entering the profession thereby raising the bar, but their voice has been drowned out by the 30% surge in NAR membership

   Truth be told, there are probably a lot of incompetent agents around the country. But there are a lot of very smart professionals in the business too. I’ll count on their voices being heard and eventually changing the business.

7. Michele A. Peters, Esq. Says:
   December 7th, 2006 at 7:05 pm

   I thank Sandy Mattingly for her thoughtful response. The reputation a broker or sales agent has is dependent on their individual actions. I am a firm believer that education is power and the best sales associates are the most educated and have diverse work backgrounds. Agents should interview at many firms to evaluate which firm will be the best to represent their listings and who they are as persons. Sellers should do likewise.