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Let’s set the scene. You walk into a store looking to purchase a high-end stereo system. Here are two distinct ways things could play out.
Scenario 1: The salesman — let’s call him Tim — listens to your wants and needs. He asks good questions, fills gaps in your knowledge of acoustics, and suggests several options. The process takes longer than you anticipated, but Tim makes you feel like you’re his top priority the whole time. Informed and empowered by his guidance, you choose which one to buy.
At home, you love your new stereo, which delivers everything Tim said it would and more. You tell your friends about the experience and advise them to use the store and ask for Tim. He takes care of them as well, becoming “the go-to stereo guy” for a lot of people you know.
Scenario 2: This time, the salesman — Ned — seems anything but forthcoming. He promises to get you a great deal on a particular model, but skims over the details. Even though you’re not able to test it in the store, you go ahead and buy the system anyway. At checkout, you notice some additional fees that Ned never mentioned. Back home, you’re not thrilled with how the stereo sounds, but you tolerate it because you’re also not anxious to start over and do it all again. Meanwhile, Ned enjoys his commission from a quick sale and the incentive bonus he earned for selling the item his store needed pushed out the door.
You never go back to Ned’s store again, and you share your displeasure whenever it comes up in conversation.
Ultimately, Tim has a better career than Ned — because he shares all his information, elevates the customer experience, and positions himself and his store for repeat and referral business. Ned is pretty much a one-and-done guy, putting his interests above those of his customers and depending on his store for sales opportunities. No one has ever walked in and asked for him.
Tim is transparent. Ned is not.
Transparency In Real Estate
In the residential real estate industry, like retail, transparency should be the norm, not the exception. Real estate professionals guide people through the largest financial transactions of their lives, and the process can be overwhelming — especially for first-timers. Clarity, fueled by transparency, benefits everyone involved: the buyer, the seller, the agent and the brokerage.
Clarity builds trust. And buyers and sellers deserve an agent they can trust. They deserve to know their agent is putting their interests first and providing honest, complete information every step of the way. They deserve to see the whole picture, not just part of it.
Understanding Commissions
The full picture has many elements. For instance, consumers deserve to understand commissions, the services they can expect, and how MLS cooperation and compensation work. That notion has led some MLSs to display buyer-side commission offers on listing ads. It’s likely, in fact, that this shift will be the norm across the country fairly soon. Competent buyer agents needn’t be nervous about displaying their commissions. But they do need to be able to articulate their value — and then deliver in a way that makes the fee a nonissue.
Home buyers and sellers also deserve transparency in terms of what homes are available for purchase in their search areas. Holding properties back for a legitimate “coming soon” reason is fine, but too often the real reason behind exclusive “pocket listings” is creating a competitive edge or doing what’s best for the agent or broker. The National Association of Realtors is trying to address these gaps through its new polices.
Customers deserve similar transparency about their agent’s track record, experience, production and training. And they deserve ethical, straightforward behavior from everyone involved in the transaction.
None of that is too much to ask.
Building Trust In The Industry
These should be easy standards for our industry to embrace because transparency benefits practitioners as much as consumers. The trust that results is crucial, as each encounter with a Tim elevates the entire industry and creates consumers who are more apt to come back to the “store” and transact again.
Transparency is smart. Transparency is professional. And, in our ever-changing, tech-enabled world, transparency is expected. Consumers demand it, in part because they get it in other industries. “The package will arrive sometime soon” no longer cuts it; people want to track its exact location. They’re not satisfied with “Your ride is on the way;” they expect to see the tiny car moving toward them on their phone.
Similar innovations in real estate have added transparency, streamlined the process (think electronic signatures) and changed the way homes are viewed (think aerial video, HD or 3-D photography, smart mapping and more). These advancements are terrific because they make things better for the consumer. Innovations that go the other direction — often designed more to generate leads than to actually serve consumers — add more confusion than clarity.
Fortunately, the positives far outnumber the negatives, and new technology continues to help agents produce even more. When agents focus on their clients’ interests, communicate with clarity and embrace transparency, good things happen. And more consumers have a Tim experience than a Ned experience. Everybody wins.