CBS News published an article on Sunday talking about jobs growth in America. For the first time since 1945, the jobs report from the Labor Department reported that the net change in the number of jobs created was exactly…. zero. Given our population increases, this represents a serious problem for our nation’s economy. Like all industries, real estate needs a growth plan.
The CBS article pointed to General Motors, a bankrupt company that is part of a bankrupt industry of manufacturing here in America. The automobile industry in America was once the crown of our manufacturing empire, fulfilling the aspirations of every family seeking personal transportation. GM had to make some radical changes in their effort to survive – radical changes that included a complete retraining of the workforce and the support of the United Automobile Workers union – its labor force.
GM worked with the UAW to negotiate lower wages for workers along with cross training. GM believes that these developments represent renewed opportunities for long-term revitalization of our labor force. The real estate industry needs this kind of thinking to grow jobs too.
The article pointed to two additional trends – trends that made me consider today’s MLS, Association and brokerage labor force. Although real estate is different from General Motors and the rest of Corporate America – we seem to act like them from time to time – we are an old industry that is challenged to embrace change, especially from its labor force.
I believe that there is one central issue that retards the real estate industry from finding significant improvement – a lack of accountability for quality service. Agents are independent contractors. This means that agents must hold themselves accountable for quality. It is unrealistic to think that real estate can reinvent itself to become an industry where agents are employees of the broker. Short of that, the industry needs to approach the problem of accountability and quality service using a different tactic.
MLSs and Associations who support real estate are not much different than Wall Street. They too are hording cash in the form of reserves. I submit that if there was ever a time to spend reserves – it is today. Agents and brokers supported Associations and MLSs in saving money for a rainy day. It’s raining on real estate – hard.
If real estate wants to invest in the future, the cash reserves held by MLSs and Associations need to be invested in training and retooling our industry. There are too many indicators that our industry is off track. The Harris Interactive survey shows that real estate agents are among the lowest respected professionals in America. It is a great time to change this, and create new jobs in accomplishing this change.
Here are two ideas for rethinking real estate – additional continuing education requirements and more full time trainers employed by Associations and MLS.
Increase requirements for continuing education
The bar for licensing and continuing education in real estate is far below other similar professions like insurance and financial services. It is not even close to law or accounting. We have lots of room for growth here. If Associations will set higher standards for qualifying and maintaining your license as an agent or broker, we will produce a higher grade of real estate professional. Significant growth in the training industry for CE trainers would be needed, driving a larger labor force in real estate and improving the quality of agents.
Institute Agent Ratings
Lets face it. We have bad agents and good agents servicing homebuyers and sellers today. But our industry has gone to great lengths to hide our flaws. This has allowed ineffective, untrained, and uncaring agents to hang around. Agent ratings would become the filter to remove underperformers, and ferret out agents in need of additional training.
In thinking about this article, I tried to reach out to the head of NAR’s PAAG committee that is in the process of establishing an accredited REALTOR University, Richard J. Rosenthal DSA,CRE, FRICS, CRB, GRI. In the past, Mr. Rosenthal has held many important roles in the real estate industry, serving as a director of NAR for the past 26 years. He currently lists being Liaison for Special Projects, Vice Chair of the REALTORS Federal Credit Union, RPAC Major Donor Liaison, Past Chair Real Property Operations Committee.
I love the real estate industry and have a tremendous amount of respect for the best professionals that constitute the top tier of our labor force. Use reserves today to invest in agents who want to be the best, and raise the bar of professionalism.