First Things First in Real Estate Practice

Most of us that have served time in the military have been the beneficiary of training that develops skills that serve us well for the remainder of our lives. One of those skills is punctuality.

Recently, I attended a local Real Estate Expo. Arriving early provided me the opportunity to spend a few minutes discussing the state of real estate practice with the event's featured speaker, who is recognized as one of the nation's premier coaches in real estate. During our short exchange, I mentioned the need for better training, and much more demanding pre-licensing requirements for Realtors. The speaker agreed, but indicated that real estate leadership, national and local, would never let that happen for one simple reason - MONEY. Extending the time, and the difficulty of obtaining a license means more money required to get into the profession by applicants, and a longer training time. In simple terms, that means fewer Realtors. Why? Some just won't have the dollars, and others, the time and proficiency.

But, the speaker's words spoke volumes. And, while he willingly voiced them, doubtless there are many others who share his feelings.

Fundamentally altering how real estate is practiced must begin with a change in what's valued in the business. And, as any organizational change expert will tell you, that change has got to begin at the top. Without "buy in" from those in leadership positions, changing the standards in an organization or profession is virtually impossible.

But, one may ask, what's in it for them? Why should those in leadership positions in the real estate business change anything? Do leaders have an ethical and professional responsibility to improve the way their business operates?

Have your ever wondered what the difference between leaders and managers is? The short answer is, managers manage things, and leaders lead people. Another simple distinction is that leaders point out the right things to do while managers ensure things are done correctly. In simple terms, the responsibility and charge of leadership is not simply to make sure things get done, it is to make sure you and those you are "leading" are doing the right thing. As Stephen Covey emphasizes in his book, The Speed of Trust, this develops trust among a profession's members, but just as importantly, the clients that use it as well.

For Realtors, the importance of trust, and faith in their practices, is the basis for their referral business. For many, it's the lifeblood of their practice. For real estate leadership, trust is the bedrock of the business. Without faith in the profession and professionals they're using, why should buyers and sellers of real estate rely on Realtors and their profession to do business? Simply put, they shouldn't. Instead, they'd be better off depending on an alternate source to place their faith in. So, what might leadership do to fundamentally and radically transform real estate practices and procedures to enhance the public's trust?

It must begin by realizing that the overhaul must be "transformational", not piecemeal. That means a new level of change featuring innovation and daring by leadership and practitioners alike. The characterization or term, "Transformational Leadership", was coined by Presidential historian James MacGregor Burns in 1978, to describe a model relationship between the leader and their followers. Burns focused on a more moral and virtuous example featuring new attitudes and perspectives - in other words, a new way of thinking, and new approaches to old problems. In many cases, this new approach requires a new "breed" of leadership. Because, as we all know, it is certainly hard (but not necessarily impossible) to teach an old dog new tricks.

This new level of might begin by including a tougher standard for owners and brokers, the key players in our profession. The old standard of "what they knew or should have known" is just the beginning of what this group of leaders should be held accountable for. How about greater responsibility for the practices of their agents that are a party to a transaction? For example, how many mistakes are made today by agents (how many of these errors result in a failure of the agent to act in the best interest of their client?) involved in short sale or foreclosure transactions due to the agent's ignorance because they've had little or no training in the specifics of either type of those special circumstances? More than a few. In each of those transactions, specialized training is one of the keys to success. Yet, there is no requirement for the necessary specialized training by leadership at the local, state or national level. You have to wonder why?

Secondly, better communication standards or practices would greatly enhance the way business is carried out. The time wasted by trying to track down agents and information due to unanswered and unreturned inquiries is enormous. Now, are those missed or unreturned calls the fault of the managing broker or owner? Well, not directly. But, if their firm's culture (not to mention, this profession's) is one that tolerates unprofessional practices, then the blame is certainly partly theirs. As many Realtors would admit, many firms willingly look the other way rather than confront those that are routinely guilty of these faults.

Most owners would rather not upset the money cart. One too many admonishments might scare off the money maker. But, what if managing brokers demanded the same higher standard of practice from all the agents they oversee, and none was "above the law"? How easy would it be for an agent to find another enabler to practice under?

Do better practices mean a better product? By all measures, yes. So, why aren't they required? When will leadership begin to set higher standards for those practicing real estate? Perhaps these are questions, we who practice real estate, need to be asking more and more of those who sit in the seats of real estate leadership.

As mentioned recently by Lem Marshall, the Special Counsel to the Virginia Association of Realtors(VAR), in discussing what's needed to dramatically improve the Short Sale process, he said that improved competence by agents would go along way in making a dysfunctional process much better. His audience was a group of brokers and owners. Lem was making it clear to those who hold the reins of power that they are responsible for having their agents prepared to practice properly. Demanding competency is simply good leadership. And, after all, accountability is a strong motivator. Let's hope those in the audience we listening.

While Lem's Road Show was sorely needed, in an attempt to improve a Short Sale process badly in need of repair, let's hope it is just the beginning of a larger effort to move this profession's leadership in the right direction.

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