Posted on Mar 02, 2015
I can remember well the time I purchased my first house. I remember the shuttle the eager real estate agent did between the vendor and myself until the early hours of the morning in order to get the deal done. The backwards and forwards trying to bridge the price gap between two seemingly implacable positions. I can also vividly remember the first few years of my travelling to China and the long sessions negotiating back and forth to finally wrap up deals. The position taking and the difficulty in bridging a gap between very different price expectations.
But those memories are back in the 70’s and 80’s.The negotiation in recent weeks between the Eurozone partners and Greece reminded me of this bygone era. Like my house buying and China negotiating experiences- adversarial positions taken by both sides with little consideration for the potential benefits to each of a deal that worked for both. Times have changed. Adversarial position taking negotiating is so ‘80’s. It’s different now.
But it’s a pity that there are many people who didn’t get the memo. We don’t pay bills with cheques any more. We pay them online. We don’t use faxes anymore. There is email. We use satnav – not paper maps. Buy a new car today and it won’t even have a CD player – it’s all MP3. Times have changed. And to be effective in what we do, we need to change both attitudes and the way we operate.
For many in the real estate industry the changes they see are about increased regulation, more paperwork and an emphasis on butt covering. There certainly are those changes. Generally the fine print is now longer than the contract. But more than that the whole style of deals, contracts and relationships has changed. It’s no longer about the extent that the wool can be pulled over others’ eyes, or how little you can do and how much we can bill. It’s more about how much value we can add. In fact that is what it is all about.
In the same way that we can now buy music without needing to go to a record store- why do we need to buy and sell real estate using a real estate agent? The answer is of course: Unless of course they add value to the transaction. Then we flip the argument on it’s head and the question becomes “why would we not use a real estate agent when they can add so much value to the transaction?“
But (to paraphrase George Orwell), all real estate agents are not created equal. Nor do they learn equally. There are many who still reside in that dark place in the 1980’s where deals were not transparent and the concept of value was still in the future.
Just as the “what’s best for me” attitude in negotiating has made way to a “ how can we create a deal that works well for us all “ viewpoint, the most successful agents have morphed from the viewpoint that “ show and tell” is the way to sell, to the attitude that a successful agent is one who is a matchmaker, in that they bring together the parties who have coalescing needs. By matching these needs the agent adds value. Creating an adversarial relationship does not add value.
Agents are able to add a massive amount of value to the process of buying and selling real estate. And as we have said many times in the past – we love paying commissions to successful agents. Because if we are paying commissions we are doing deals. And that is what we are in business to do.
But what worries us are some of the titles agents give themselves. And therefore how they see their role. We don’t go much on titles, and a lot of that comes from our time working in the USA. Everyone we did business there seemed to be a vice-president of something. Or nothing. Because ultimately it was just a meaningless title. They all still had to go upstairs to get permission to do anything.
So we are sceptical at Directors, Associate Directors, Brokers, Negotiators and the like. What we really want is an agent who calls themselves a matchmaker. Who understands that putting deals together that provide value to both parties, is what it is all about.
Tell me you know how to matchmake and I’ll take your call right away.
