Editor’s note: The following guest perspective was submitted in response to an Inman News article, “Fear still rules real estate industry,” published on Feb. 24, 2006.
I’m not sure that the real estate industry “fears” new entrants, but I am certain that they are more paranoid these days. And for very good reason.
Being paranoid is not all bad. Paranoia guided Andy Grove and Intel to incredible success in its early life. I have always lived with the clear understanding that if you want to understand someone’s true intention, watch what they do, not what they say.
Actions speak volumes over words.
In another industry, JetBlue applied to lease airline gates at the Long Beach Airport in Long Beach, Calif., from the Port Authority many years ago – and secured the leases. American Airlines had good reason to be paranoid. This signaled that a new entrant had discovered a convenient loophole – unexecuted airport gate lease agreements — and moved in to become a competitor.
In the real estate brokerage business, when an organization “joins” the multiple listing service, the industry has a right to be paranoid. Licensed brokers join this data management service to become an integral part of the real estate transaction — enjoined in the business — not sitting on the sidelines.
By comparison, it is a lot different to use the Sabre reservations system by calling American Airlines or going to http://www.aa.com/ to schedule a flight than it is to apply for a license to use the Sabre system to access American Airlines’ current and historical pricing data in an effort to build “something” for the consumer in the airline industry. Furthermore, what would American Airlines say if Delta had inquired to use the Sabre system for its reservations system? Maybe that is why most of the major airlines manage their own information, using their own data management systems and only share their company’s information with permitted parties.
Is the real estate industry paranoid about the intentions of new entrants? You bet. Is the industry fearful of new entrants? Only because in so many ways, and unlike most all other competitive businesses, we have collectively failed to properly manage our data assets and secure our proprietary information. Thanks to the leadership of the National Association of Realtors and the MLS industry – our industry now has one of the lowest barriers to entry of any business in the world.
Get a broker’s license, join the MLS, aggregate the information and in an instant — with not even one listing, no offices and not so much as one salesperson — you are in business as a Realtor with thousands of active listings, years of local comparable sales information and thousands of outsourced salespeople, who all work for your competitors.
Practicing paranoia is good for the health of each and every real estate broker who actually has offices, agents and generates assets — especially if those assets happen to be listings and comparable sales. These assets are the lifeblood of our industry and are the sole work product of each and every broker.
Note to brokers: Be paranoid. Watch for actions. Be cautious. Stay in business.
Kenneth L. Jenny is managing director and CEO of tranCen.com Inc., a residential brokerage services company.
What’s your opinion? Send your Letter to the Editor to email@example.com.