Buying or selling a house should be a HAPPY experience!
Most of us REALTORS wish nothing but HAPPINESS and peace for our clients, yet we’re seeing more anguish and heartbreak than ever in this market, and we want everyone to CHILL!
Richard Courtney is a local Nashville legendary wordsmith about things Real Estate . . . and The Beatles.
He writes a weekly column in the Nashville Ledger in which he’ll frequently, humorously, and unabashably tackle tough topics relating to the Nashville real estate market.
This week, he hits upon something I consider to be of real concern for The Real Estate Sales Profession. (Link to his article below)
Of course, the root problem isn’t specific only to the real estate industry. If you’re not a Real Estate Sales Professional or Broker/Owner of a firm, measure what’s going on in your industry against this line of thinking.
There will always be room in every industry and every marketplace for different business models. I’ve recognized 2 broad categories within which virtually every business falls:
- High Volume – Low Margin – All about being BIG and selling the MOST volume leveraged for low overhead at low cost. It’s more about the numbers and less about the quality. “Scaling up” is a common goal. The real issue with these models is often overwhelming Span of Control issues for the managers/Leaders. How many people can one manager (Principal Broker) effectively mentor, train, and Manage/Supervise?
- Traditional Niche – These businesses tend to be more focused on quality and service. Slow growth is acceptable because they wish to protect their reputation in their market. They would rather have fewer high quality team members and maintain an office environment in which the Manager/Leader can be equally accessible to all members for Mentoring and Training. These models may be more expensive, and their owners unapologetically believe that “You pay for what you get.”
Of course, there will always be other species in differing stages of evolution or in confusion as to their goals and purpose (Identity), and I believe most of those operators are in an uncomfortable “no-mans Land” as they may be trying to scale up a Traditional Niche business to High Volume – Low Margin. For these Businesses, The Peter Principle often defines their demise. “The Peter Principle is a special case of a ubiquitous observation: Anything that works will be used in progressively more challenging applications until it fails.”
Here’s the promised link to Richard’s article along with 2 quotes from that article which, I believe, Define the root of our problem of angry Buyers and Sellers:
“With the Realtor army having grown from approximately 2,400 to nearly 3,500 recently, one third of those in the line of fire have no battle experience. It shows.
Some firms have hundreds of troops under the management of one person, with the result being no chain of command and, at times, a lack of leadership.”
Richard Courtney is a real estate broker with Christianson, Patterson, Courtney, and Associates and can be reached at Richard@richaerdcourtney.com
The most scary thing about the numbers Richard tosses out is that they are likely LOW . . . I’ll venture out on the Pareto Principle limb of this tree and conjecture that 80% (not Richard’s oh-so-conservative “one third”) have little to “no battle experience” AND “lack of leadership.”
That’s a double whammie of epic proportions which really can throw a wrench in the cog of even the smoothest of transactions.
In my view, this is unacceptible and unnecessary. I know that there’s no level of governmental regualtion that can oversee/fix this issue . . . It’s a by-product of “free-market.”
I can say that where the rubber will ultimatley hit the road for these “Beyond span of control” operators is when something does go wrong. The Tennessee Real Estate Commission (TREC) is taking a STRONG stance that whenever a Licensed Real Estate Professional misbehaves and files a complaint with TREC . . . If TREC finds “Guilty,” they hold that agent’s Principal Broker personally responsibile for “Lack of Sufficient Supervision” . . . Facing that kind of guantlet would surely be duantingly disturbing for any Principal Broker managing “hundreds of troops,” eh?
Every day, I am thankful for The Vital Few “troops” of Pareto Realty. We’re a whopping 17 strong and growing ever so slowly, and I have great comfort in knowing who they are and what they are doing and take great pleasure in helping them every day to succeed.
So . . . My choice of business model?
Interested in learning more about our approach?
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