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9 June 2010

The Love Triangle Between Broker, Agent and Consumer

I often find myself in conversations about the dynamics between real estate agents, brokerage owners/managers and the consumer. Frequently I’m asked to debate whether our industry should be consumer centric, broker centric or agent centric. I love a good debate, but picking sides on this issue is a no win proposition. Picking a side would imply putting the needs of one of these parties above the others. I don’t think that would lead to the best outcome.

Instead think of a triangle. What makes this shape special is that it’s three sides are all the same distance. I view the relationship between broker, agent and consumer like a triangle. In other words, equal.

The consumer is on the top and both brokers and agents should be focusing on meeting the consumer’s needs in the best way possible. At the base of the triangle is the broker at one side and the agent on the other. Both need to bring equal value to each other and both deserve to be rewarded for that value.

We saw this relationship get out of balance starting back in the late 90’s. With agent centric business models being adopted by brokerages, the agents kept more and more of the commission dollars. Brokers began offering fewer and fewer services and tools. However, agents expected certain things from their brokers and were often disappointed. The broker and the agent were in a bad marriage with each other. They shared the same house but had stopped communicating and started sleeping in separate bedrooms.

Then the market downturn hit. That combined with the emergence of technology and the changing needs of today’s consumer left the agent and the broker looking at each other agreeing that it was time to work things out.

And that leads us to today. The successful brokers and agents I see across the country have recommitted to each other. They have found a place where they are each offering a mutually beneficial value proposition and collectively as a team they are focusing on delivering exceptional real estate experiences to the consumer.

Brokers and agents are like parents who should be working together to provide the best possible environments for their kids (i.e. the consumer). Isn’t it time we worked as a team?

11 thoughts on “The Love Triangle Between Broker, Agent and Consumer

  1. Nice post, Wendy. It's so nice to hear that you actually found some brokerage owners who have re-centered their company vision and culture to recommit and work together in a spirit of mutual respect with their agents. All too often broker-owners and company management have way too much disdain and a tremendous lack of respect for their agents. Until this changes we will continue to see the downfall of the current brokerage model. And it is falling. These past few years have seen a growing trend of consumer-centric real estate boutiques started by agents who became brokers with a clear vision and business plan for the future. It just might be too late for many of the owners of the old-school brokerages to kiss and make up with their agents.

    1. I had the opportunity last week to speak to a group of agents and brokers on this topic at the BuzzRE event in Portland. It felt like a bit of a therapy session. I was encouraging agents not to give up on their brokers and continue to talk to them about their needs and expectations. At the same time, I was encouraging brokers to listen and engage with their agents. Both side are making assumptions about what the other needs, thinks or expects.

      A great example of this is office space. I talk to brokers all the time that say "my agents would leave if they didn't have a private office". But when you talk to their agents they often don't share that opinion.

      As with most relationships communication is at the center of great accomplishments and great failures.

  2. To me, this article shows why we're not in sync with what consumers need. We're a service business, that can only sell products if someone allows us the opportunity to do so. The only thing that has to matter is what buyers and sellers think about us and how we help meet THEIR needs..not ours. Their needs are what matters, not ours. Our needs are external to theirs and can be dealt with within the corporate business model, and it should never be commingled: we need a business plan, and consumers need action.

    We need to stop making anything realtor centric and making everything consumer centric. We need to make it easier, and less time consuming for them to find their dream home…as well as selling their dream home.

    How we sell homes can't possibly be the best an entire industry can do to help the process. Consumers deserve better than their getting for their commission dollars, and it's time for us to give them better formats. All the talk and ideas that happen on your site, which I think is one of the best in the industry, never makes it to the consumer level. It's great for rallying the troops, and it may help sell some franchises, but it doesn't help sell homes and to create value…and that's where we need to be. When you go from one brokerage site to another all we see is the same basic stuff…and it doesn't have any value anymore, not even to the agents. And it doesn't resonate with todays buyers. When was the last time you read a listing description and looked at all the miniscule pictures, and said to yourself..wow I can see myself living here. It doesn't happen, and there's no reason why it shouldn't.

    Content drives action, and we neglect that point. The way we try to market and sell homes is outdated and it doesn't work anymore, and it's all because we neglect what consumers need. Their needs and expectations have to come first, or someone like Apple or google will figure it out and blow us away. They get it…they know what consumers WANT…we don't.

    Sorry, we're missing out big time

    1. Hi Brian

      Thanks for your insightful comments. I agree, as an industry we have to do better. It is going to take a lot of hard work, but we are committed to helping those who are willing "move the cheese" for the future.

      1. Wendy, as an industry we're terrible at what we do…we're beyond outdated. The mls is the best we can do at marketing homes, and every brokerage company tries selling homes the same exact way. Is this really the best we can do…I think it is, because no one's doing anything different. It's all about selling homes, but the content that we all provide about the home is the exact same content that we've been providing for generations. It's terrible and it doesn't resonate with anyone. The industry accepts and expects mediocrity, and that's exactly what consumers see. The industry puts zero emphasis on the consumer, because it doesn't care what consumers want. How does anyone possibly believe that you can market homes in the worst economy ever, the same exact way as when the market was the best ever…it doesn't work.

        The problem with the brokerage business is that the business model doesn't work for anyone…seller, buyer, agent or broker. it's not even a business model. The large commercial brokerages are light years ahead of us, because they make it all about the consumer, not about them. The treat it as a real business, not like the residential brokers who hire anyone with a pulse.

        The ideas and concepts that are talked about on this site are wonderful, but it never makes it to the brokerage level…so there's no noticeable difference.

        You don't need pithy statements like "we're willing to help move the cheese"…we need to see action. This industry is heading for a major disaster from outsiders who know how to market out products and run companies better than we do…and it's all our fault because because brokerages just don't get it.

  3. I agree with Brian

    Focus on the consumer

    Agents need to focus on the consumer

    Brokers need to focus on the agent the same way the agent focuses on the consumer

    Everyone wins

    It is the brokers job to create a culture of service and empower their agents to give great service.

    As for the broker providing an office, I like the ala carte model. Gives me more control of my expenses.

  4. Wendy – great post – and you're right – agents and brokers need to communicate with each other rather than making too many assumptions – but as I read your post, you are making the argument that we all need to keep the focius of the business on the consumer (consumer-centric) while being considerate of the business needs and desires of the brokers and agents- Which means I win the discussion we started at ReTechSouth 🙂
    BTW your shoes were the sartorial highlight of the RisMedia event this week – and seeing you well outweighed the "content-sequences" of the sessions. 😉

  5. I see the whole brokerage business model as being broken beyond repair. It's a big blob and it's exceptional at nothing, it lacks creativity and innovation, the websites do nothing to educate consumers about the listings, neighborhoods, or communities. There's nothing original or personal about anything.

    What intrigues me, is that this blog is great…great content and discussions, but when you go to one of your own franchise sites, it's all the same basic stuff as anyone else's site. What this shows me is that brokerage companies, especially the large franchises are still so out of touch with consumers. You all think it's all about the Realtor, and that what you do is good enough. But it's not good enough, and it never has been, but when the economy is flying high then almost anything works.

    Major companies all over the world are listening to consumers and changing their business practices and cultures…everyone except for real estate brokerage, who continue to do it the old way. Hire anyone with a pulse, write unbelievably poor listing descriptions, and provide miniscule low quality pictures…and then expect some buyer somewhere to get excited about a home. Sorry, but todays buyers are far smarter than our outdated views. Consumers wait till the last minute to call a Realtor, and I don't blame them.

    Mediocrity is an acceptable practice for real estate brokerage.

    Better watch out because there's a lot of smart people out there, who can do our business far better than we can do it ourselves…all because they have a better handle on what consumers want, than we do.

    A lot of great ideas on this site, but unless it gets onto the brokerage web pages, it's nothing but talk.

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