Originally published on the TowerHill Blog.
New brokerages that commoditize the agent relationship with the client are nothing new, but we’re seeing more of them as the pace of accessible technology picks up. Technology has a great way of cutting out the fat in service industries – and where there is limited or no actual value, it disrupts with ease.
We see this in the field of real estate. Your average Realtor is quickly becoming a commodity. There was a time when you needed a realtor to give you access to information about properties on the market. But in the past 15 years, with the rise of websites like Zillow, Trulia, etc, Realtors have been increasingly stripped of their perceived value as gatekeepers of information. They are no longer privy to much info that consumers are not. Some brokerage models have taken advantage of that, offering up their agents instead as overpaid door openers and taxi drivers. Already, even those two functions are being replaced with technology, think: “smart” homes and Uber/Lyft. You might even be able to find all of the documents you need to write a contract for a small fee online, bundled up nicely and templated for you. You can see where this is going.
We see that in the absence of value, technology replaces what humans once did – or enables one person behind a screen to do what it took many more to do before. So what is to become of the modern day real estate agent?
To thrive, agents need to bring more “game” to the table and that game has to be both substantial and irreplaceable to their customer. “Game” can also be more technically translated as “career capital”, a term coined by one of my favorite authors, Cal Newport. In an interview in Forbes in May of 2013, Cal gave a beautiful definition: “Career capital is the skills you have that are both rare and valuable and that can be used as leverage in defining your career…”
Career capital is not a marketing gimmick (“buy this house and I’ll sell your home for free”), rather it is the actual distinct value an agent brings to the conversation with a customer or client. Career capital is also more than the promise, no matter how sincere: “I promise to work for your interests above all else with the highest level of integrity.”
Agents who endure for many years in the industry and who have completed hundreds of transactions have often accumulated a wealth of knowledge and therefore become very valuable. Indeed, ANY great service professional should be worth much more than you could possibly pay them. What is the opportunity cost of not having a great surgeon or a top-tier attorney? What about the opportunity cost of losing a negotiation that would place your family in a desired school district or of finding water damage to a foundation before settlement?
In real estate, the game has been set up so that nearly anyone can get a license. The great majority of new agents fail out of the business after a year or two of paying dues to their local and national associations.
The problem is that these new agents have no career capital – no “game.”
Like many parents, I have coached my kid’s soccer team. My two oldest are quite good now, having played for five years or so. After countless matches, hours in the backyard with a ball at their feet, and a steady dose of watching the most skilled players in the world, they now have soccer “game.”
But when they first took the field as 5-year olds, they were not playing soccer… not really. They were picking clover, chatting with their goalie, waving to grandma, but they were not really in the game, in spite of being on the field of play.
Some kids may have some more natural, raw talent, but it’s very raw. They are a little faster, see the field better and can focus more easily on the game.
One of their friends had already trained as a gymnast for a couple of years and her balance was noticeably different – she seemed to know how to use her little body to speed after the ball. Otherwise, though, she was part of the herd of freshly minted soccer stars in their first season. It was up to the coaches to help form their potential.
We all start this way. Yes, some agents may have been attorneys before practicing, others may have been builders or architects. These skillsets bring better than average game to the table. But there are specific skills that need to be honed in order to be a great defender of a real estate client – an excellent and qualified fiduciary of the client’s interests.
Up until recently, the answer has been to allow agents to simply fail their way forward or out of the business. Brokerages have not been created with a system in mind to train and invest into their agents. Most don’t have this as their mission or passion. Filling this void in agent education are training organizations who promise to teach agents to generate leads but stop short of coaching them to be excellent fiduciaries for the good of their clients.
This need gave birth to TowerHill Realty, with the mission to train great leaders for our industry. This vision necessitates at it’s core the forming excellent practitioners with a ton of Career Capital in our field and creating the framework for them to achieve excellence on purpose. Such agents will become invaluable to their clients just as a great player becomes invaluable to the game.