These thoughts have been percolating in my brain for a long time, but it wasn’t until I had a Twitter conversation with Rain City Guide’s Ardell Della Loggia (a must follow, by the way) that I decided it was time to crystallize them into written words.

Setting the table

This post on AgentGenius a few weeks ago stirred things up, when AG contributor Ben Goheen argued that the answers to some difficult questions (emphasis mine) would move the real estate industry into a more transparent direction:

• How much do you actually net for selling my house?

• Do you get paid more when another agent from your office represents the other side of the transaction?

• Why do you pick one home inspector over another?

• Do you receive any benefits if I use your company’s lender, title company, etc.

Needless to say, the fight that  started in the comment threads of that post, spilled over into other parts of the blogosphere with Jeff Brown (@bawldguy) offered this very different perspective on this BHB post:

Transparency is honest dealing from a basis of rock ribbed integrity — nothing more and nothing less. The rest is self righteous dung.

I dare you to demand to know what your dentist, doctor, CPA, attorney et. al. are netting from fees they charge you for their services. What a joke — a bad joke, but a joke nonetheless. Who do these buncha Kumbaya, hand-holding yahoos think they’re kiddin’ anyway? Transparency my ass. They want information their parents/grandparents would’ve had the good manners never to seek in the first place. Why? Cuz it’s none of their damn business and they knew it.

Cutting the crap

Knowing how much an agent actually nets on a particular listing benefits the client in no way shape or form. Let’s not forget what the end game is all about here: The client called, hired and will pay the agent for results. That’s it! Not profit margins, cost of goods sold, or balance sheet analysis. We must never forget that. An agent that actually got a home sold by making a collect call to a prospective buyer (and nothing else) served the interests of his client better than the agent who spent thousands of dollars “marketing” a property without selling it. Period! So let’s cut the crap and let’s not attach accounting voyeuristic fetishes to a nice sounding word like “transparency”.

But that’s not all she wrote

Is there place in our industry for transparency, or is this just the latest “self righteous crappola from the PC crowd”?  Let’s look at one aspect of the real estate business and the answer will become clear instantaneously. I don’t think anyone in their right mind would argue against the fact that Buyer Representation Agreements and Listing Agremeents are slanted and biased in favor of the real estate agent. They are first and foremost documents that ensure the exclusivity of representation and ultimate compensation of the agent.

Yet, a Buyer and Seller are expected to sign on the bottom line of these agreements after a phone conversation, a quick coffee or at best, a shiny listing presentation. Honestly, how much does a client know about your ability to deliver those results they are looking for after that quick rendezvous? Elementary my dear Watson: Didley Squat. The result of this “arranged marriage system”, is thousands upon thousands of clients ending up with agents who “just stuck the sign in the yard and never showed again” or the ones who “are never available to show but I can’t get out of my agreement”.

So, in to make a short story long: YES! There’s desperate need for transparency in real estate.

Final Reviews

How do we resolve this issue? On the one side, you don’t want no agreements in place and good agents working hard for client getting screwed by unscroupulous clients (YES, there’s some of those). But on the other, it’s not realistic, or fair, or transparent for that matter, for a client to commit to an agent without knowing anything about them.

We resolve this issue, the Ebay way:

After every transaction we close, we ask our clients to review the service they received on a third party site (in this case, Yahoo Local). We don’t guide them one what to write; we don’t moderate or delete their reviews; and we don’t cherrypick who gets to review. It keeps us on our toes and it helps the next prospective client make a decision on whether we’re the right fit for them. And here’s where the story comes full circle to my conversation with Ardell.

Writing a review might not directly benefit the client that just closed (although it doesn’t hurt them). But, the truth is, it might have benefitted that client to read those reviews before they made the decision to work with me. If done with “rock ribbed integrity”, an unrigged review system would lift the veil, hold the agent accountable for their performance and benefit the consumer tremendously – which ultimately is the very purpose of transparency in real estate.

What are your thoughts >