Let's Take 'Er for a Spin, Shall We? - A Real Estate Parable
I was thinking this week about my real estate career, and about the amount of time that I have spent over the years helping folks who later were unable to purchase, or simply decided to "put things on hold for now", or ended up somehow doing an "end around" and eliminating me from the transaction, although this last one is much more rare.
I thought about others who make their living in straight commission sales, and how real estate stands as unique even among those other industries.
Imagine this scene, if you will:
Bert and Susan Saunders are looking to purchase a new car. They have done a bit of looking/shopping online, and they decide on Sunday afternoon to check out a couple of dealerships.
BERT: Honey, there's one that is open from 2-5pm today. Let's take a look!
SUSAN: Sounds good.
Once inside, they are greeted warmly by Dave, who shows them around for a few minutes and assesses their needs and "wants". So far, so good, right?
Here is where real estate parts ways with other industries. What if this were the ensuing conversation?
BERT: Well, Dave, I love this make, model and color.
SUSAN: Me, too. I would be interested in hearing what you can work out for us on the price.
DAVE: I think that's great. Let me talk to my manager - I'll be right back. (It seems they always have to talk to the manager, although this strikes me as odd. After a couple of minutes, Dave returns.) Good news, guys. I got my manager to come off of the price by $3500 and he will throw in a free set of mats for you.
BERT: WOW! It sounds truly perfect. So, here's our situation: we have another car that we need to sell. It's in another state, and it must be sold there, where the market is quite flat for vehicles right now. I hope we will be in a position to buy by the end of the year, if the car market improves there.
DAVE: No problem! Tell you what - why don't you guys plan on coming back every few weeks, and we can meet for several hours each time. I will show you each model in your price range, in order to maintain the rapport that we have developed today. That way, when you are ready to buy, you will think of me first.
Of course, no car salesperson would ever say this, nor would a real estate agent, but it is a reality in many cases in the real estate business. I am generally happy to spend the time, because it kinda comes with the territory, regardless of the overall outcome.
You may argue that car salespeople don't make much on each transaction, and that is a valid point. However, I can't think of ANY other businesses that require the investment of time that ours typically demands in order to sell a home. Yes, there are cases when things go very smoothly and quickly, but there are plenty of examples of ample time spent with absolutely no return.
What is my point? I guess we must decide that there are some clients who will never provide a return for us, and try to mitigate the losses. Conversely, we must hope to make enough on the "good" clients that they make up for the tire-kickers and those who are otherwise unable to purchase.
Being good stewards of our time has never been more important.
The good news, in my humble opinion, is that this is why we are unlikely to go the route of some of the industries which have been almost completely supplanted by the growth and prevalence of the internet. Although it is a terrific and common way to START a home search, it is not easy to consummate without the assistance of a licensed professional.
I remember that during my second year in real estate (1998), we started hearing rumblings about how the spread of the internet would make our function obsolete, or that loss-leaders (read: discount brokerages) would take over and our commissions would drop precipitously. To be sure, these trends have had an impact in some ways, but we are still a vital part of the process, and as such, we play an important role in the national economy.