Real estate agents – what is going on?

B2B Editor8 February 2016

The story of a broken relationship with a bright future, an industry on the brink of technological revolution, the detrimental nature of competition, and change…

When we think of real estate agents, we think about some smug overpaid guy in a suit, probably responsible for the horror stories of days gone by when he wasn’t to busy stealing Christmas presents from the local orphanage, or maybe you think of a clean cut model standing at the front door of a shiny new home, big white Colgate sponsored smile stretching from ear to ear, ready & willing to sell you a new life. Either way, it doesn’t actually matter what you think of anymore, unless you are thinking about the future – more specifically the future of property commerce.

How will the real estate industry look in 10 years time? In the 1960’s, 70’s, and 80’s Australian manufacturing started to move offshore, a staple food of the Australian economy’s diet for generations, was no longer being sold at the local IGA. Then in 1984, Australia’s finance industry underwent aggressive de-regulation, as newly elected Treasurer & future Prime Minister of Australia Paul Keating issued 40 new foreign exchange licenses and a further 16 new foreign banking licenses. Australian business owners had little choice but to adapt, the Australian economy was born again. Out of the Fordism, into the Fire – Its warm embrace beckoned us closer. But change is winter, and in the words of Jon Snow – “Winter is coming” (RIP).

For a lot of us, surviving the winter is not going to be easy. It’s going to push us to an absolute limit, challenging us to re-think the status quo as we step into the unknown, on the outskirts of our comfort zone. It’s quite an exciting feeling though isn’t it, the pursuit of an unknown. I imagine it’s how Captain James Cook felt in the 18th century as he sailed his fleet of English colonialists across the ravenous waters of the Pacific Ocean int the presumed safety of Botany Bay, rolling thunder overhead, signaling his imminent arrival to the indigenous population.

Now remember friends – Water may be scarce in the barren plains of uncertainty. But never fear! Survival is a natural human instinct. Nature is on our side. I think we are going to get through this – so long as we don’t rely on nature to do everything for us. A cruel & unpredictable mistress, she’ll just as easily hang us out to dry. Yes, if we are to survive the 21st century, it will be as dependent upon our ability to adapt to change – as it will be our ability to see change coming.

…But how do we know what to look for, you say?

The hitchhiker’s guide to the galaxy:

1. It’s the age of information & technology right now. You’re in it.

2. The Internet of things is here, a product of our collective – inter-generational knowledge and not one to be underestimated, smarter than any one individual living amongst us.

3. Robotics, AI, and Automation are coming soon to an industry near you. Will you be professionally relevant? Or even necessary? In 10 years 1 in 3 Australians may have their jobs replaced by R2D2. Now’s the time to buy shares in seek, or a light saber.

4. Offshore services – same quality, faster turnaround, cheaper prices – the definition of a perfect competitor. So in a free market economy, I have no choice but to bid you farewell and safe travels Australian services (smash sham-pag-nay bottle on hull of ship).

5. Bring a relevant skill, a new resume and a warm Chinese farmed Australian wooljumper for when the fire goes out… because baby it’s cold out.

10,000 hours

I’ve spent most of life around the real estate industry. My dad is a real estate agent, and my mum is a property manager. Together they own and run their own boutique real estate agency in Canberra, Australia. My dad started working in the real estate industry when I was 14 years old, I’d just started at Telopea Park High School, a few km’s walk from his new offices in Manuka. I remember walking there after school to get money for McDonald’s. I didn’t really care about real estate. I was going to be a sports star so it meant nothing to me at the time. I’m 25 now, so fortunately or unfortunately for me, depending on how you look at it, I spent the next 11 years of my life hearing about the trials and tribulations of the Canberra real estate industry. In that time, I also endured a handful of brief stints working for some of Sydney’s most infamously competitive eastern suburbs real estate agencies. That’s 4015 days for those playing at home. Isn’t there a philosophy of life along the lines of, ‘if you do anything for 10,000 hours you won’t completely suck at it’? I guess we all end up doing unexpected things in life though, don’t we? The unpredictable nature of things is part of the fun.

Mr. Morgan

In 2015, 600 members of the Australian public were asked to share their opinions on 30 different Australian professions during the annual Roy Morgan Image of Professions survey. Interview candidates were asked; As I say different occupations, could you please say from what you know or have heard which rating best describes how you yourself would rate or score people in various occupations for honesty and ethical standards (Very high, High, Average, Low, Very low)

The results were overwhelming, with real estate agents finishing in 28th position out of 30. Now you might get the impression from these results that the Australian public does not believe real estate agents are ethical or trustworthy, but you would be completely… right? (Which is interesting when you consider we willingly place the most valuable financial assets of our lives in the hands of these apparently untrustworthy, morally barren individuals) Is it possible 2015 was just a bad year for real estate agents? Maybe they were having an off game? I decided to give my friend Gary Morgan a call (current chairman of Roy Morgan research and son of founder Roy Morgan) to ask him why real estate agents had placed so low this year. Gary informed me that these results are not exactly unfamiliar territory for real estate agents, who, since the surveys inception in 1987 had consistently placed in the bottom 4 places. (I guess the 2015 off game theory’s out). That’s 28 years in a row! That’s the bloody relegation zone! They should have been kicked out of the Australian economy by now surely?! In Gary’s opinion, this year’s results (and apparently the last 27 years results) are the product of a murky operational past that real estate agents are yet to escape from.

So it’s kind of like when I was a kid and I used to chase my cat around the house. It’s 2015 now and I don’t chase the cat around the house anymore, but the cat still runs away. Lesson? Cats don’t forget. Apparently, neither does the Australian public when it comes to their relationship with Australian real estate agents. After speaking with Gary Morgan, I decided it was time to dive head first into the Australian real estate industry’s murky past – to see if there was any hope for this broken relationship, or if it was time to call in the lawyers and start splitting up the assets. I can now confidently confirm that there definitely maybe is. Hope.

The interview

I spent the next 12 months (approximately May 1st 2014 through to May 1st 2015) conducting my own informal brand of journalistic investigation into the Australian publics less than ideal relationship with ‘he who-shall-not-be-named’ (real estate agents).

My brand of investigation was established on strong foundations of caffeine, no journalistic experience, and too much spare time. Getting the interviews wasn’t hard, people were more than happy to speak with me. I interviewed everyone from active professional real estate agents, to retired real estate agents of days gone by. Then there were the finance agency owners and brokers, the government agencies & bodies, the registered training organisations and teachers, the software company owners and developers, the magazine editors and fellow journalists, an Australian university professor, the trainers and coaches, and of course, members of the Australian public who had recently sold, purchased, or leased property.

On the day of my first interview, I was excited, nervous, focused, and caffeinated. I was ready. At the time I was quite sure real estate agent were guilty of all crimes ever. ‘Clap ’em in irons ‘n send ’em to the brig’ I thought. Unfortunately though (mostly for my ego) it didn’t take long for my findings to render my na ve (borderline ignorant) opinions utterly redundant, and absolutely useless. By interview number 10 I was completely disillusioned, and more than a little bit disorientated. Where was I? How had I got here? How long had I been here? I suddenly found myself burdened with the weight of an unbiased opinion, a position that comes with a great deal more responsibility than I originally started with, or ever really wanted. I had set off with a 100 rounds of ammunition looking for blood, and so far, I hadn’t taken a single shot, returning with only a handful of berries and news of a distant land full of strange animals and land for farming. I had lost my will to fight, or at least, I had redefined my enemy. By interview 25, I was a changed man. I had performed a perfect 180-degree reversal on my original opinion.

Even the judge from Russia had appeared to enjoy it. I’d jumped ship. Prosecution to Defence. Deep inside the abyss, I had found something. It began to emerge – slow, silent and deadly. My eyes strained to see in the darkness, when it hit me, exploding out of the darkness like a layer cake of interconnected problems resembling a bowl of spaghetti thrown against a wall at high velocity. Spaghetti was everywhere. As I wiped the onion and tomato from my eyes, it became painfully obvious what was happening.

The Australian public was blaming real estate agents for everything wrong with the real estate industry, including problems outside of their control! Real estate agents were the scapegoat, not the culprit. How could I have been so blind! You can’t exactly blame one individual strand of spaghetti for the whole damn mess now can you?! But who had thrown the plate…
(To be continued)

Sam Joel
Real estate industry blogger