Editor’s note: We’ve called upon our readers to explore a path forward for the real estate industry through the Roadmap to Recovery editorial project. This contribution, by industry veteran Jack Harper, marks the conclusion of the Roadmap to Recovery project and the start of focused coverage based on common themes highlighted by our readers during the course of this project. We welcome your continuing participation as we explore the structure of real estate commissions, virtual brokerage, the credit and foreclosure crises, and other pressing industry issues.

In the past 25 years that I have been in the residential real estate industry, I have become mildly amused at the cyclical nature of our business. First, we have the market cycles in which we ride giddily on the waves of success due more to the market and less to our own business plan. For years, we float joyfully on the crest, buoyed comfortably by the steady stream of visitors to open houses, calls triggered by our yard signs, and eager responses to our marketing.

After a time, we start to get a tingling sensation down our spine, or maybe the hair on our neck stands out a tad more, as we begin to sense that things may be changing just a little bit. Then, in what appears to be a sudden tsunami, we find ourselves slammed harshly on the beach of reality as we finally understand that things have indeed changed, and often in dramatic ways.

"OK," we think. "We have been here before and we will be here again. All I need to do is wait it out and things will go back to the way they always have been." So we struggle for a while and we work a little harder at getting back to basics. We know, for certain, that we will be ready for the market when it comes back to an even state.

Often during these cyclical downturns, some enterprising agents and brokers make changes to their business models in an effort to gain whatever competitive advantage they can, hoping to hold steady on their revenues as we wait for the tide to change. We have seen these model-changers come and go.

Some have stayed around, but their model was not strong enough to sustain them when the market heated up, and they were often not willing or able to shift back to center. As an example, we can look at Foxtons’ U.S. operations — an East Coast-based brokerage company structured on the pure discount model. They are now gone. Or, we can look at Redfin, an online-based firm that rebates fees to clients who were willing to take on much of the front-end work themselves. That company made some significant changes in an effort to attract more business and to keep profits from dwindling — specifically, company officials cut about 20 percent of the workforce and began to offer free home tours for buyer clients (the company previously charged a fee for tours above a certain limit).

Now, I don’t point out this trend just to say that we are likely to see the same old return to "normal" this time. We have seen too much change to believe that things will ever be the way that they were for the last century. Our world has changed, probably forever, in very real ways.

I am not telling you what you don’t already know. Listings are everywhere, and anyone can get as much information about them as they need to. Sales information is everywhere, and the world has access to it. Valuation sources are everywhere, and consumers love to tell us what their house is worth (although they usually are not on the mark).

The fact is that consumers want to be involved in their own sales and purchases. They have tools available to them and they are not afraid to use them. We just refuse to "allow it."

When I was a little Realtor-to-be, I loved to watch the cowboy television shows. Although I never knew it, this was formula-series at its finest. There was always a good guy; there was always a bad guy. The good guy always won. Same has been true in residential real estate, hasn’t it? There are the good guys (us) and there are the bad guys (them) and the good guys always win — as long as you are on the side of traditional brokerage. The problem with this paradigm is that it just will not work anymore!

We are hearing a great deal about the consultative or "a la carte" business model. Many have tried to draw battle lines here, but this is not going to work this time. It is not the traditional vs. the consultants. It is not "them" vs. "us." What we need now is a whole new paradigm. We need to put our traditional thinking on its head and see it from a different point of view — the consumer’s point of view.

Here is the most shocking observation that you will see, looking through these new glasses: There is no good guy. There is no bad guy. There are consumers and there are professionals. Professionals come in all shapes and sizes. But, I promise you, we are all in this together.

Some offer only full-service, some offer only a-la-carte service. That is fine. Consumers will naturally migrate toward the business model that attracts them.

But what if there was a new way of thinking? What if we each offered transparent consumer-choice-based service? What if we kept the traditional model fully intact, and then we added the option of client choice? There is no rule that says we have to line up on one side of the street or the other.

We are all good guys. We are good guys (and gals) who offer to clients what they want, based on transparency of service and based on educating the clients as to what choices they have, the costs for each option, and then we let them choose.

I don’t have a crystal ball, but I am confident in this prediction: Consumers will choose to work with the professionals who offer them the option of a business relationship that works the way they want to work.

If we do not offer the clients choice, they will choose to get it somewhere else. This cannot be lip service. If we truly offer choices, then we cannot dictate or even try to convince the client that they should really work with us the way that they have always worked with us.

Give them a choice, but let the choice be theirs.

Jack Harper is a longtime Realtor, author, trainer and consultant. He is proponent of a consultative model for the real estate market.


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