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Fear And Loathing In The Real Estate Industry

Published by Joseph Ferrara (2) January 23rd, 2007 in Brokers & Professionals, Business, Real estate, Technology and zillow. Comments

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So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.

FDR, First Inaugural Address, March 4, 1933

Wellcome Mat blog had a great post about The Fear in the real estate industry. It spoke of technology choices. The advice: choose what serves your clients, what saves you time and what you can afford. Great advice. But what of the other fears lurking in the real estate forest.

  • Fear of consumer full access to MLS listings
  • Fear of business models that reduce the net commission to brokers and agents
  • Fear of investing in technolgy that may be outdated next year (virtual tours?)
  • Fear of more agents in the field (and less qualified to boot)
  • Fear of falling prices or falling markets (especially if it’s your market)
  • Fear of rising mortgage interest rates
  • Fear of the blog learning curve
  • Fear of triple digit DOM
  • Fear of clients expecting more
  • Fear of more costly advertising
  • Fear of getting ripped off by another real estate vendor on the Internet (h/t Damon Pace)
  • Fear of the DOJ
  • Fear of Zillow

Should brokers and agents have anything to fear, but fear itself? Or are there real wolves looking to feast on Little Red Riding Realtors?

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  • I don't pretend to know what a real estate agent feels at this point in time (I have never been an agent); but maybe the fact that I have a outside in view helps?

    Seems to me that in a down market, where houses are staying on the market longer and losing value while doing so, liquidity is where it's at! I am not an agent, but I can guarantee I would be trying to do as many transactions as possible right now.
  • Thanks for the post - I went over to the WelcomeMat and left a comment there which I won't repeat here.

    The list of fears is a nice representation of what many in the industry are coming up against at this point in time.

    I wonder how many have really explored their fear in a real way - not their reactions, but the actual experience to see what is underneath it. It's not an easy exploration, but it is freeing.
  • There is no doubt that there are real monsters out there that will eat the careers of many a real estate practitioner in the next few years. I believe that we're right in the middle of a major reinvention of the business of real estate.

    Rather than raising the bar to entry through rules changes, the marketplace is about to help curb the massive influx of new and inexperienced agents. There has been a great lure for new entries to the business with the real estate boom over the last few years. Media now and in the near future will present a more balanced and less alluring picture.

    Those who are innovative and offer real value to the real estate transaction process will come out of this stronger and very happy with the outcome. Will they have to work a bit harder for a bit less?.....Probably.
  • I like John's remarks: examining the roots of the fear can be liberating. Fear can be the difference between being reactive and proactive in a transaction. So what is discounters have come into the market. So what if disintermediation is a threat. How are we going to survive? The flexible are the ones who will make it. In my opinion, the flexible are the ones who can think out of the box and ALSO make the best negotiators in the real estate transaction!
  • I liked Jim's comments though I still think that we need to raise the barrier to entry. And I believe that those who embrace the emerging trends and technologies will not necessarily worked harder, but differently and smarter.

    And fear is usually caused by a perceived threat. The greater the fear, the more you should bet on the threat being realized. In this case, the threat is the revamping of the entire real estate industry and the way the business is conducted.

    Some will stick to their old-school ways, but they will soon be left in the dust by the ones who change with the times.
  • Oh agent dear you must never fear
    whats down the road or on the way.
    You might not know or faintly hear
    until next week or another day.

    But without fear you must go
    being full of faith you will survive.
    It only takes the right phone call
    to prove the point you are alive.

    The secret to enduring, as you must
    is getting up and reaching out.
    Write a blog, read Sellsius
    talk a walk and give a shout.

    a friend of lar-
  • I Know I know - corny and not that good.Lar
  • Bonnie,

    Well said! You know what is strange to me? The tech vs. tradition debate causes nothing but a loss of focus on the people that matter: the customers (and don't think that they aren't staying afoot on the debate). If someone offered me 5 star meals through a drive through window for 1/3 the price, I would still be going to sit down restaurants and paying waiters to help (for a better experience...oh and also because I would like to keep my wife). There are always the people that are going to pick up the telephone book, and call down a list of entries to find the best price. Do you want these types as customers? I don't.
  • Ok...one more post and then I am going to work for the rest of the day. Here's a quote that has to be posted:

    “Our current landscape is filled with complacency, be it in the corporate world or on the environmental front. Only on the fringes of an ecosystem, those outer rings, do evolution and adaption occur at a furious pace; the inner center of the system is where the entrenched, nonadapting species die off, doomed to failure by maintaining the status quo,” Yvon Chouinard; Let My People Go Surfing, p. 254
  • Christian should have gone to work before scribbling that last tripe. Just kidding Christian.
  • Here's one more...Fear of getting ripped off by another real estate vendor on the Internet.

    This is one I hear all day long. Luckily we have some experience overcoming this.

    Great post by the way.
  • Good point Damon, we'll update.
  • Deep, man DEEP!

    How about fear that current leadership can't bring the industry out of the quagmire caused by the "fear".
  • Funny I have a different set of fears. I fear that the industry is not changing fast enough.
  • Absolutely, Teresa! The world is changing by the nano-second and we're still being invited to rubber chicken dinners to honor people who are not computer literate... (I'd better stop here) md
  • Teresa - I'm right there with you on that.

    Michael - Now THAT was hilarious! Don't forget the morning networing meetings at Starbuck's! Gotta love all the awards banquets for people completely screwing up the whole industry for consumers and the rest of us.
  • Well, you could be trying to answer the survey just sent out by the Realtors Assn. of New Mexico. It is all questions to US about why we think the consumer has a poor opinion of US.

    I didn't send it in, as the questions were skewed in their wording (DUH!). It's really interesting that we're asking the PROBLEM about the problem, rather than the consumer.
  • To Lar---Not Good-->Great! We vote you Blog Poet Laureate.
    http://www.liza-kliko.com/laurel-wreath/images/...
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