With the economy in decline and the housing market more so, real estate agents are leaving the industry. This is first and foremost a sad thing for anyone who loses a job or has a business fail; I never like to see anyone suffer or have financial problems. Overall, however, there is a silver lining to that cloud for the consumer and the licensees who remain active in the industry.

Not all, but a disconcertingly high percentage of the ex-agents should never have been agents in the first place. In the market run up from 2002-2005 we saw an unprecedented number of new and reactivated licensees enter the market to share the bounty. However, while the short term profit may have been favorable, we are still paying the price of the inexperience and, often, the negligence of practitioners who were able to outrun their mistakes in the irrational exuberance.

I remember well the calling cards of new agents who could hardly believe their good fortune at their involvement in a high-dollar transaction. Deals got screwed up left and right, but who cared? Another offer was a week away. And if you had a neophyte representing you in a purchase, it was never their fault your offer wasn’t accepted, you just lost a bidding war. We had people who never sold a house in their life collecting commissions on multimillion dollar sales like it was candy land. Just like the stock market spike of the late 90’s, many of people looked far smarter than they really were.

I know this because I am part of the cleanup crew. People listing their homes for sale today are horrified to discover that decks, finished basements or bathrooms they were told were legal at their purchase are, in fact not in compliance. Neither the last listing agent nor their buyer agent bothered to pull the property card, and the title company missed the detail in the rush of the time. I am in the midst of selling a property that last passed title in 2005 which has a submerged oil tank that would have failed a test in 1995, let alone now. It is costing my clients over $20,000. Twice in the past few months I have run across people who have excellent credit inexplicably stuck in high interest loans, most likely because a loan officer decided that profit superseded honesty. Where was their agent? Where was the advocacy? The list goes on, but I wish I had a dime for everyone who tells me that they regret using their newly licensed cousin or part-time aunt for their agent last time.

In each of these instances, an agent was paid handsomely. They did not earn that commission; it was monopoly money they used to buy homes and cars that they can no longer afford. In many cases they meant well, and their broker is responsible for the mistakes. We’ll never know in most cases, but our collective karma has caught up with the industry. Sadly, whatever price we bear is more than being shared by our clients who trusted us with their financial lives and were often hurt. We made our bed and now we are sleeping in it.

This brings us, of course, to today. One agent I know has his real estate website redirect to another endeavor. BMW’s have given way to Hyundai’s. An attorney told me recently that his biggest source of bankruptcy filings and short sales are real estate agents themselves. Enormous brokerage offices have rows of empty desks. And I am bombarded by solicitations for 2nd income opportunities from people who must know that agents are scrambling for income. Attorneys are actually thanking me for referrals.

But those of us who remain plying our trade have discovered a new environment: fresh air. It isn’t so noisy in here anymore. The overwhelming percentage of agents I am dealing with now are returning my phone calls and emails in a professional, timely manner. Oil tank tests, surveys and other due diligence are being handled in the beginning of transactions and not as part of a last minute scramble. Many agents are telling me how they remember the last decline in the late 80’s and how they coped. We are a profession again, not a pit stop for career nomads. We are conducting business, and even though the circumstances are worse, the process is civil and professional because the frosh and junior varsity are no longer clogging the field. And we know how to cope with the PR problems exacerbated by the “exes” because we always have.

Consumers now should have more confidence in the industry because by and large the pickers of low hanging fruit have left the market. Those who remain are survivors, fighters, and overall far more professional and experienced. They don’t pick apples with a broom and bucket; they know how to use a ladder. The drama may come from the outside, but far seldom from the agents themselves. It is for these reasons that I am glad the herd has thinned. I no longer have to sift through newbie’s to find a competent colleague. And these are people that know how to return a phone call, pull a property card, review a good faith estimate, and advocate for their clients. I’m not doing their work for them, or cleaning up their mess.

I salute the survivors, and I look forward to closing transactions with them. Together, we’ll help repair the damage done in the past decade and build the public’s confidence in the profession. 

I don’t know what the full story is, and we’ll perhaps never know, but Caroline Kennedy has withdrawn from consideration to replace Hillary Clinton as a New York Senator.  My money is on the idea that once Caroline Kennedy found out that she wasn’t Gov. Patterson’s choice for NY Senator, she took her ball and went home. Regardless, this ends a media circus that taxed my faith in my fellow NYers who thought she’d be a great choice.

Appointing Caroline Kennedy as Senator would be extremely demoralizing to most New Yorkers. She would not have earned it save for her accident of birth, and it would be contrary to the spirit of upward mobility that the current administration seeks to champion. Simply put, nepotism sucks. Yes You Can unless there is a Kennedy who wants it. Sorry.

Enormous deficit aside, my faith in Albany was on the upswing before this spectacle. The Empire State Hypocrite was out of office in disgrace, replaced by a man who appears to be down to earth, honest, and pragmatic. He is visually impaired and a minority. Yes He Can.

But my favorite thing about Governor Paterson is that he signed the Commission Escrow Act, something George Pataki vetoed in spite of the huge legislative (and popular) support of the bill. This was a long time coming, and I am hoping that it is the first of many things that are positive coming out of Albany instead of the partisan gridlock we all put up with.

Frankly, I am disappointed that Ms. Kennedy wasn’t dismissed earlier. From my vantage point this was ego driven, and she got a rush from all the attention, at least while it was positive. If her name were Caroline Faranda she’s have gotten as much ink as a possible Senator as my dog. Her appointment would have rendered the Commission Escrow Act more of an anomaly than a trend.

Here’s to a trend of progress, and not slipping back into politics as usual. I wish Caroline Kennedy well and appreciate her philanthropy, but the delusion that she was qualified to be a Senator would have undermined us all. I hope the new Senator is the best choice for New York and the country and not the best political choice. I also hope that it continues what appears to be a movement to restore New York as the Empire State and not the Red Tape State.

My last post mentioned the importance of having a Unique Selling Proposition, or a characteristic that sets you apart from the competition. Having a USP that you can explain in under a minute is more effective than a 30 minute listing presentation with all the bells and whistles. One of the comments stated that having a USP is not easy for some of us. Perhaps, but it isn’t as hard as you might think, even if you aren’t a high producer.  

First, in any given listing presentation, your competition is not the thousands of licensees in your market, but the 2 or 3 other agents that the prospects are considering. Your prospective clients aren’t interviewing your whole board. So that narrows it down a bit. Let’s say that you just need to beat out 2 other agents to get the listing. Let us also presume that your middle name is Average. There is nothing exceptional about you. You are vanilla. You carry fewer than 10 listings, you made $45,000 in 2008, and you stutter. You aren’t great at anything. What can you possibly offer that makes you the man or woman for the job ahead of the 2 other agents they interview?

The answer, my friend, may be easier to find than you think. I’ll give you 2 quick ways to be Joe USP Excellence.

1. Call your past clients. Just ask them what it was that made them choose to do business with you.  Whatever their answer is, that is a key component, if not the actual USP itself, right there on a silver platter.
2. When you first sit down at a listing presentation, tell the people before you begin that you appreciate the chance to do business with them and that you are big on market research. Ask what it is about you that made them consider giving you an interview. Again, their answer will contain at a minimum the seeds of your USP.

Let’s suppose that the answer you get is underwhelming. “You seemed like a nice young man.” “You struck us as energetic” “We walked into the office and there you were.”

Those are USPs? They may not seem like it, but they can be. Let’s take them one at a time, and I’ll tell you what I would coach one of my agents to say in response:

• “You seemed like a nice young man/lady.” That is very kind, Mr/Mrs. Prospect. I think I’ve been blessed with an honest face, and I am often told by buyers that they feel at ease when they are with me. Since buying a home is such a huge stressful decision it is important that the people considering your house feel as comfortable as possible. I think that’s the key to my success.
• “You seemed energetic.” I appreciate that you noticed. Real estate is hard work, and does require energy, and enthusiasm is contagious. I only take listings like yours that I genuinely feel I can sell. I think that plays into how people perceive my listings- they hear it in my voice, and if the house is right for them they seem easier to sign on. That’s how I sell houses.
• “We walked into the office and you were the first person we spoke to.” That wasn’t an accident, Mr and Mrs. Prospect. Selling real estate isn’t for people who hide in cubicles, it is for people who know how to work hard, follow up, and hustle. I don’t quit until the job gets done.  People tell me that I seem ubiquitous, but that is only because I hustle to get my listings sold.

Of course, some people may give you better material, but bear in mind that you don’t have to be the top seller in your marketplace or own a particular farm area to have a USP. You simply have to possess something that the others you are directly competing with do not. For instance, if you sell only 5 homes a year, it could be that you treat each client individually and that you pick only a few clients a year for extremely personal service. That could give you an advantage over a high volume guy who walks in very impressed with himself.

People do business with people they like and feel comfortable with. All you need to do is give them the rationale to justify that. When you ask them why you made the short list, you are then given the facts you need to transform your meeting from an ad hominem bragfest (which listing presentations often are) to something far more powerful. If people choose to at least interview you, them telling you WHY they gave you a chance is revealing a compliment you should leverage to your advantage. People will choose you for their own reasons, not yours, so make them right!

This post is not directed toward my respected colleagues who have posted recently on listings they failed to get, or clients they couldn’t convert. Those people are no strangers to rejection but they are also extremely well -acquainted with success. This is for those of you who have made 10 consecutive listing appointments and come up empty or if you’ve not hit a bulls-eye in a dog’s age. So if you are in a dry spell or slump, this is for you.

You have a great presentation. You make a compelling case. Your facts, figures and data are devastatingly convincing. You can’t figure out why you are losing these listings. I’ll tell you why, and I haven’t even been in the field with you, but 10-1 here’s what I’ll see:

1. You talk far too much.
2. You aren’t in touch with the people across the table from you.  

Let’s get back to basics.

• We sell homes. We sell people on hiring us to sell their homes. In sales, we first identify a need, then fill that need. Are you robotically finding out why people are selling and robotically going into your spiel, or are you creating rapport with them and tailoring your discussion around THEIR SPECIFIC reasons for selling? If they are moving to Florida, bring that up several times in the conversation so they know you are on the case. it’s all about getting them to Florida.
• No presentation is compelling without a USP, or unique selling proposition. What makes you different? What sets you apart? Instead of a compelling 45 minute fact marathon, develop a compelling 45 second answer to the question “why should we choose you over the other agents?” Maybe you grew up in this neighborhood. Perhaps you are the best stager ever. You might work the niche that buys their kind of house. Be brief and confident.
• Ask questions. This is about them, not you. Questions take the canned pitch tone away, and they allow people to discuss their favorite subject: themselves. And the more people talk, the more clues they’ll give you as to what matters to them and how you can make that happen.
• Take 2/3 of your presentation and scrap it. People glaze over after 3 consecutive minutes of blather, let alone 30.
• Take a breath. Stop batting out brilliant answers to questions and pause every so often. Repeat a question occasionally so they know you heard it. People don’t want brilliant answers as much as they want to be understood.

Less is more. When your presentation becomes bloated with pre-emptive solutions to objections you may not even get, you have a problem. Simplicity, not complexity, sells. Slow down, listen more, and simplify your case. 30 seconds on what makes you special always trumps 15 minutes of your firm’s accolades. If you do that, don’t be shocked when 5 out of the next ten meetings turns into a listing.

If I want to read spam, I can read my junk folder. I can blog anywhere; I blog on Active Rain in part because I feel my expertise and presence will be appreciated by my colleagues and that will yield some referrals. Overall this is a very vital and enriching community.

Except for the referral exchange, which, I am sorry to say, is a disaster, at least in New York. People are posting 3-star referrals (personal referrals, that is) which are just requests for referrals in their area. Another 3-star referral is an advert for their out of state listings. And these postings remain up for weeks and months.

I don’t expect the Active Rain staff to be the posting police; we need to maintain the integrity of all the user content ourselves. That isn’t just blogs, it is the referral postings we make. If you are going to post an inaccurate referral, self promoting spam, or any other off topic item on the referral exchange, think twice. You are undermining why you are here, and you are BLOODY ANNOYING as well. It’s like clicking on a personal ad response and instead getting a porn or hooker ad.

While I don’t expect the AR powers that be to be referral posting cops, I do propose that flagged spam, if indeed wrongly posted, should be a point reduction if it isn’t already, and repeat offenses should have other types of consequences. But really folks we shouldn’t have to discuss punishment. Just don’t post it is it isn’t a bona fide referral. Learn the guidelines and abide by them so Active Rain can continue to be useful. Otherwise, this will slowly deteriorate and we’ll have lost a good thing.

Full disclosure: I did not vote for Barack Obama. However, he won the election, he is my president, and I wish him well; the better he does, the better it is for us all. Even though Mr. Obama did not get my vote last November, he has my respect.

I am 41. I never thought I would see an African American elected president in my lifetime. I am very proud of our country, and I have never heard those words uttered with more frequency than these current days. Some people may say that because their guy won. My guy didn’t, and I am still proud. Barack Obama received more votes in the 2008 election than any president in our nation’s history. In spite of political polarization of recent years, the so-called “Bradley effect” and other stereotypes, we as a nation voted based on the content of the candidate’s character and not the color of his skin.

This to me speaks to the best of American Exceptionalism, and why our best days are ahead of us, even though we are in a crisis. Mr Obama’s election tells us that more than a color barrier has been broken. Consider the following:

• With Obama’s presidency, 2 of the last 3 presidents come from single parent households of very modest means. Since Truman, only 3 of 11 presidents have come from wealth.
• One generation removed from Jim Crow, the descendants of slaves will live in the White House. That is, in a historical context, rather fast progress. Who knows what we can accomplish in the next 40 years? 20? 5?
• When I was 6, Nixon was president and we were in the midst of Vietnam and Watergate. I grew up in a integrated town in suburban New York, but my view of black folks at that time came as much from Sanford and Son as anything else. My 6 year old son’s view of African Americans is beginning with the President of the United States.
• We can argue about the USA’s standing in the international community until we are blue in the face, but we can all agree on this: the USA is the first country to make one of it’s most oppressed minority the leader of the nation. Don’t hold your breath about an ethinic Morrocan Arab being elected president of France, an Aborigine becoming Prime Minister of Australia, or a woman becoming head of state in Saudi Arabia.
• No one seems to even notice that the last time we had a white male confirmed as Secretary of State it was 1993.

Alexis de Tocqueville was fascinated by our culture and he invented the phrase American Exceptionalism. 200 years ago he predicted some of the great debates we have in our society this very day. We are far from perfect, indeed. But in many, many metrics, we still lead the world, and for that we should be proud. We are the iconoclast nation. We are more the beacon of progress and liberty to a watching world than ever.

Sometimes we forget that the light bulb was born here in New Jersey, or that aviation became a reality in North Carolina. I could go on, like the telephone, polio vaccine, Mad Magazine, blue jeans, and the Peace Corps  (I believe the Brits perfected radar, but that only barely exonerates them for Fish & Chips), but I think you get the point. We rock, still. And just as an aside, let me know what other country I can go to, take a 75 hour course, get a license, work my tail off, and no matter what I look like or sound like, in 2 or 3 years enter the top 1% in income.

I will watch the inauguration later today both for the history I’ll witness and out of respect for those who made the day possible; the millions who suffered, the tens of thousands who gave their lives, and also the billions who will watch, wondering just what wall we’ll knock down next.

The reports of our demise seem premature. Even in this horrendous economy, there is no groundswell, grass roots change from traditional brokerage to virtual office, online, discount/FSBO brokerage despite the chatter to the contrary. Contrast that with the almost overnight decimation of stock brokerage and travel. The Internet hammered those professions, yet, as Active Rain and other sites clearly illustrate, the ‘Net has actually helped real estate brokerage. Why?

• You can’t click on a house and buy it. You have to see it, walk through it, smell it, and sit in it. And few do that without a licensee present.
• Few do that without a licensee present because most buyers don’t want the seller around when they look.
• Even when the seller is present, most of the time they are deplorable salespeople. I have an interest in a non-traditional company. Believe me, commission “savings” is more than counterbalanced by ineptitude, lack of objectivity, and absence of professional advice. Many a seller has lost tens of thousands in sales price in order to save a few thousand in fees. Penny wise, pound foolish.
• A trip or a security can be purchased online in 5 minutes. Real estate takes weeks and sometimes months.
• Travel and securities don’t require appraisal, title search, certificates of occupancy or engineer inspections.
• Travel and securities are cash transactions that can be done with a click; real estate is seldom a cash transaction and even when it is, it requires far more due diligence. See prior bullet point.
• At the risk of sounding Darwinist, overall real estate professionals are just tougher and more resourceful. This is a hard business. We embraced the new technology and made it an advantage. We adapted, we survived, we’ll thrive.   

Brokerage is more than bird-dogging for a house. Who saw the house first is immaterial, and handling the shifting landscape of the transaction requires representation. People know that a few percentage points is a bargain for what they get in return, anecdotal horror stories aside.

The market is efficient. If the Internet were going to kill real estate brokerage, it would have years ago. Until people can buy real estate for $500 immediately without seeing it, consumers will need our services. And that is a good thing.

Brokers- take 30 seconds and acknowledge yourself, and then let’s all get back to work.