For real estate brokers across the country one of the newest, and most difficult, concepts to live with is “C-level life”. This peaceful sounding phrase, recently coined by experts, has come to represent a whole new reality for businesspersons and entrepreneurs from virtually every industry in the American economy.

“C-level life” is a tag for “complete consumer control”; and for the real estate industry, C-level life has arrived. Consumers now have unprecedented access to excess-entertainment, infotainment, utilitainment and everything in between. It has put chief marketing officers, and their marketing minions, in the hot seat. It is creating a whole new challenge for brokers, a new opportunity for agents and a wake up call for the industry.

Consumers now take time to inform every interested ear about the options around town (and around the world): who serves the best burrito, which spa’s package is better than expected, and which REALTOR actually did what they promised.

Whether C-level life is a road to opportunity or a path to destruction depends completely upon the perspective and response of individual brokers and agents. For the traditional practitioner, who covets the memory of the 1985 business model, social media, like Yelp.com, will hold little potential.

However, for the contemporary broker or agent, who is willing to recognize that most of the benefits of the traditional model barely survived the last century, the new consumer controlled experience represented by Yelp is filled with new and exciting potential and opportunities. For this group it is just a matter of getting started on a new path to success.

The first leg of this new course involves the firm institutionalizing their understanding relative to who the consumer is, how they think and what they want from their real estate experience. That cumbersome term “institutionalizing” emphasizes the fact that it is not enough to merely understand what today’s consumer is doing.

In order to be consumer centric, a firm must incorporate appropriate service, communications and relationship responses based on C-level life expectations. Joining and participating in the Yelp experience, as a consumer, community member and service provider is one such appropriate response.

Yelp.com is, in many ways, a miniature of the social media empowered world of today’s consumer. Understanding and, more importantly, appreciating its many characteristics, rather than judging and isolating them, will be key to understanding both the nature and the meaning of life for today’s consumer. The motivation behind this article is to assist the reader in gaining an appreciation of Yelp, and an understanding of the role that it is playing in the new marketplace.

Simply put, Yelp allows consumers to share the experiences they’ve had with local businesses, and lets business owners share information about their business with their customers. Yelp is a social media.

Yelp provides online local search capabilities for its visitors. A typical search includes what the user is seeking (e.g. a barber shop) and the location from which the search is to be performed, entered as a specific address, neighborhood, city/state combination, or zip code. Each business listing result contains a 5-point rating, reviews from other site visitors, and details such as the business address, hours, accessibility, and parking. Site visitors can aid in keeping the business listings up to date, with moderator approval. Business owners can also update their own business’ listing information. It is this two-way interaction that makes Yelp special.

In order to establish the relevance of these activities in the eyes of the real estate industry, readers should appreciate that real estate brokerages and agents are two of the fast growing areas of interest on the Yelp site. In almost every market in the country, consumers are increasingly using Yelp to share information regarding their real estate service experience. More specifically, over the past several months more than 33 million consumers have participated in the Yelp community.

Because review writing is an art form in the Yelp community, these reviews are both artful and informative. By the way, 85 percent of the reviews posted on Yelp are positive in nature, throwing a wrench in the cogs of the cyber-conspirator lobby.

Yelp listings and related content are organized by city and a multi-tier categorization system. Content and listings can also be discovered through categorized reviews via Yelp member profiles and their review lists. Maps, leveraging Google maps, show reviewed businesses to further aid in the search and discovery process.

Yelp has gone even further than other social media sites in its effort to create the perfect social media universe. Recognizing that today’s 18 to 48 year old consumer wants to create, enjoy and harvest relationships, the site combines local reviews and social networking functionality to create a highly effective and rewarding local online community.

Moreover by adding social web tools to user reviews the site has created an almost “real life” reputation system (another millennium generation expectation). Site visitors can see which contributing users (including real estate service providers) are the most popular, respected, and prolific, how long each has been a member, and which have personal interests similar to their own. Strong peer feedback tools, and the featured placement of popular reviews on the site and in local newsletters, help motivate contributors.

Yelp also applies a “First to Review” reward system to stimulate a competition among contributing members, further motivating the creation of reviews and adding to the site’s business coverage. This feature should contribute greatly to the site’s growing real estate service review sector.

The company further encourages consumer participation and strengthens its online community through off-line events (read parties) at nightclubs, bars, restaurants, and cultural venues in various cities for its most active and sustained contributors, named “Elite” members on the site. In return, these members receive a special badge on their personalized page for every year they author a specific number of reviews or contribute to the improvement of the online community. The concept is meant to indicate that the user is a trusted author of business reviews. To gain Elite status, it is often helpful to be nominated by other Elite users, but recognition is bestowed when one writes useful, funny or cool reviews so members can vote on those reviews. Again, it is articulation, not negativity, which designates a winner here.

Finally, the site has a forum for online socialization and discussion of local businesses and events. In short Yelp is a multifaceted media community.

So, here is an opportunity for every brokerage and agent in the country to invest 30 minutes in a free opportunity to engage 33 million new consumers. By investing another 30 minutes each week, they can become a full and contributing member of the Yelp community and further their return on this investment.

Take a few moments and sign up right now. We can meet this challenge. Lets get cracking.

But many within the marketing industry knew that, in 2009, this result was different than in past years. For much of the year prior to the disclosure of the results they had been reading, in the industry literature, and learning about just how different these Generation X and Y consumers were. They had learned that this was the most powerful consumer in history.

Armed with the Internet and the power of Social Media, this consumer not only had very clear ideas relative to transparency, integrity, scrutiny and trusting relationships at every level but, more importantly, they were demonstrating the ability and willingness to punish, without process, those professionals who failed to come up to their standards. In other words, they knew that the era of winking at and ignoring ethical issues and unethical practices was over.

So what did this over 100-year-old profession do about its dilemma? Their leadership decided to act in a very immediate and decisive manner. For starters, the American Advertising Federation is teaming up with University of Missouri’s Reynolds Journalism Institute to launch an Institute of Advertising ethics. With this move they are recognizing the first issue of contemporary ethical practice. The oversight activity must be removed from the practice organization.

Today’s consumer recognizes that ethical enforcement by trade associations has not, over the past several decades, been a successful experiment. Their second decision, and perhaps not the wisest one, was naming a former foundation CEO to head up the program. This decision, while popular in the profession, will not add to the credibility of the new program. Hopefully what it lacks in common sense will be made up in his ability to convince his former colleagues to play ethically.

This gentleman’s first comments suggest a positive outlook might be in order. He was quoted as saying, “How are we going to have a positive relationship with our consumers and recruit the best and brightest people into the profession if people think we are charlatans?”

The new organization’s first order of business will be to conduct an extensive study relative to what consumers believe regarding ethics in advertising. This is a refreshing change from other organizations that have started by having a collection of senior practitioners offer their opinion. This industry knows that what its practitioners want is no longer relevant. In today’s economy it is all about what the consumer thinks.

The new organization’s second home run comes from its decision to design and implement an ethics recognition program that begins the arduous task of repairing the industry’s image by recognizing firms and individuals who are exercising exceptional ethics in their day to day practices. This is another very wise and positive step. Instead of suggesting that all advertising professionals are ethical the profession will identify those who are practicing with the highest standards and verify that “many” advertising professionals are ethical. It takes a lot of courage to begin the process of recognizing that not all within any given profession are ethical but that many are.

The new organization’s grand slam home run will occur in year two when it introduces standards of ethical practice. Here again it is demonstrating that it “gets” the contemporary business scene by recognizing that the moment in history of the “Code of Ethics” is over. Today’s consumer understands that unclear standards are un-enforced and ignored standards. The idea, of allowing for personal interpretation of ethical issues, has failed completely over the past thirty years.

When everyone is being candid, there are really no questions regarding ethical behaviors. Suggesting the existence of a “close zone” only encourages those who believe they can slip back on the good side when they catch someone watching them.

The advertising industry is to be congratulated as it undertakes this courageous effort. It will not be an easy task, but it is a task that must be accomplished for any profession that hopes to co-exist with today’s consumer.

So what, you say, does this have to do with the real estate profession? Thank you for asking. In response we would share the following observations.

• Our industry continues to look the other way relative to ethical issues. We apparently believe that we can escape the scrutiny of today’s consumer when it comes to issues of ethics and ethical practice.

• We continue to ignore the fact that the existing REALTOR® professional standards system stopped working some years ago. Measured either by operational metrics or emotional support within the profession, it is simply a non-starter. Try implementing an ethical REALTOR® of the Year program and see how you do.

• We continue to believe that ethical behavior can be driven into the REALTOR culture without effective enforcement or appropriate recognition. There is simply no clinical evidence to support either of these theories.

So here we are, standing alongside the highway of commerce, ignoring the overwhelming body of evidence that is telling us that we must prepare ourselves, and our profession, for a whole new era of practice and consumer acceptance. We don’t have to be as dynamic as our brothers and sisters in the advertising industry. But why not start the conversation. We are not going to escape the ethical scrutiny of today’s consumer, and a market that become more transparent every day, so let’s begin our rehabilitation with recognition.

We can meet this challenge. Let’s get started.

Welcome to the word of knowledge services and knowledge management. This article is offered to assist brokerages to understand the who, what and why of this transition, how it has occurred and how to adjust business operations to embrace knowledge as a product for managers, agents and the consumer.

The REALTOR® love affair with education can be traced to the post World War II era. The concept of professionalism in real estate is rooted in that point of history, when the industry set about to create a whole new configuration to deal with the post-war consumer, the returning veteran and a new marketplace. This process saw the transition of the pre-war dirt peddler into the post-war real estate broker, creating a whole new approach to real estate marketing.

Among the several elements on which REALTOR® leaders focused, with respect to their new creation, were the concepts of ethical behavior and education. Both were seen as being essential to any group that wanted to capture both the respect of the public and an appropriate market share.

Dictionary.com defines education as:

The act or process of imparting or acquiring general knowledge, developing the powers of reasoning and judgment, and generally of preparing oneself or others intellectually for mature life

In fact, this definition highlights both the history of education in real estate and the current dysfunction. The REALTOR® culture spent the vast majority of the past sixty years trying desperately to accomplish each of the three functions inherent in the above definition.  These efforts manifested themselves in the identification of perhaps two dozen basic courses that survived, for some 30 years, as the real estate “3 R’s”. Also refined was the delivery process of education, using a system of classrooms, lectures, examinations and designations, all of which enjoyed the presumption of lifetime memory.

It is not necessary, for the purpose of this piece, to pass judgment relative the success of these efforts. It is however, necessary to make the point that, in today’s real estate marketplace, there are no longer any time or resources, and should be no need, to develop powers of reasoning and judgment, nor to set about the tasks of preparing REALTORS®, intellectually, for a mature life.

Today’s REALTOR® knowledge challenge traces its origins back to 1985 – the year generally recognized as the beginning of the information age. Since that date three developments have occurred.

o      First, informational technologies developed that allow us to collect and distribute information and knowledge

o      Second, the consumer evolved from knowledge dependency to knowledge sufficiency, and is on their way to knowledge addition

o      Third, an information culture coalesced that determined  that the aggregation of information is a very positive thing, and that sharing these aggregations or “databases” is an even more important thing

The fact is, there is so much information flooding into the real estate space, that the mere acts of bringing it to the industry’s attention and converting it to knowledge will require vast amounts of the industry’s intellectual resources, and necessitate creating standards of practice that define the minimum levels of knowledge required to meet the expectations and demands of today’s consumer.

The summation of this analysis is simple.  The real estate industry must realign its resources away from education, and into knowledge services (the act of determining what one should know) and knowledge management (the act of effectively distributing information and knowledge) so that REALTORS® know: 1) what they need to know about; and 2) where they can find it when they need to know it.

An excellent example of this phenomenon is currently making its way through the system. It was just over a half year ago, in November of 2009, that the Meredith National Media Group research unit shared their incredible disclosure of their summer research in a white paper entitled The Rise of the Real Mom.

As a starting point, the question could be asked; why would anyone in real estate care about what Meredith has to say about anything. The answer is simple. Meredith is one of North America’s leading media and marketing companies, with businesses centering on magazine and book publishing, television broadcasting, integrated marketing and interactive media.

The Meredith National Media Group features 23 subscription magazines, owns 12 television stations, and has approximately 150 books in print. They have established marketing relationships with some of America’s leading companies including: The Home Depot, DIRECTV, DaimlerChrysler, Wal-Mart and Carnival Cruise Lines. Meredith has 32 websites in operation.

Meredith’s consumer database, containing more than 85 million names, is one of the largest domestic databases. In short, Meredith is in touch with a lot of people, and it asks them questions and measures their consumer related behaviors every chance it gets.

If these qualifications don’t impress the reader, consider this: in the research leading to its “Real Mom” white paper, Meredith discovered that in today’s leading 18 – 43 year old consumer segment only 46 percent of men consider buying a home important, as opposed to 86 percent of women.

The Rise of the Real Mom white paper explores what multiple generations of American women want when it comes to family, work and life in the 21st century. It focuses, in depth, on Generation X (ages 30 to 44) and Millennial (ages 18 to 29) mothers (65% of the real estate market demographic) and how they differ from their older counterparts. It also examines how marketers can, and should, improve communications that target this demographic.

Now, six months later, Meredith is here again, this time painting an even more exacting portrait of today’s female consumer in another white paper entitled The Reality of the Working Woman; Her Impact on the Female Target Beyond Consumption.

“Working Woman” drills down even further. This discussion begins with an observation regarding the historic precedence set by the cover of the January 2010 Economist magazine that announces, “We did it.” This exclamation, of course, refers to the fact that in its fourth quarter 2009 labor statistics, the Bureau reported that women held 49.8% of American jobs. This is a big deal for America and even more so for anyone who would attempt to market to working women. For the Y generation, this statistic, and all that it stands for, will be a seminal event.

The impact of the information contained in these two publications, on the real estate industry and its practitioner, is nothing short of profound. Yet in the ordinary course of REALTOR® education, this information would not reach either REALTOR® seminars nor classrooms for at least 24 months.

Another even more immediate example of the challenge will be found in the soon to be released results of the 2010 census.

The deluge of information and knowledge surrounds us like spring runoff. The issue for REALTORS® is how these resources will be treated. Will they run, like a torrent, flooding the landscape, and end, wasted in dry riverbeds? Or will their potential be accumulated by knowledge dams, and released from information reservoirs through appropriate conduits, distributing their valuable lessons to working REALTORS®, in order to keep them relevant to the marketplace? The challenge starts with your brokerage. We can do this.

Jeremy’s hands-on approach and personal interaction has proven invaluable.   With each visit he brings his considerable personal knowledge about the real estate business, industry, and consumer trends so that leadership can determine how that information can best be adapted locally.  More than that, he brings a dedication and personal commitment that is unequaled.  Our staff of four is motivated by being involved with innovative, challenging activities that make a difference in their lives and the lives of our members and in the association’s role in the community.    A member in a neighboring association who is  serving as the Regional Vice President for NAR summed it up recently when he posted on our Facebook page, “Once again Missoula is leading the way!”

At no time has our status as something special been made more clear to us than on November 15th of 2009 when we stood in front of twelve hundred REALTORS®  in San Diego and were recognized as the top winner in NAR’s Game Changer competition. It was a direct result of Jeremy’s  vision, skill, and dedication to our achievement that we were there.

Members, rightfully so, are concerned about receiving value for the dollars spent.  For our association, working with Jeremy has provided a very recognizable and measurable return on investment.

Sincerely,

Mae Hassman,CEO

Missoula Orgnization of REALTORS®

Last week was the 19^th edition of this venerable event and absolutely no one was disappointed. Once again the group gathered at the Four Seasons Resort in Irving, Texas, always an appropriate venue both to promote interactivity and encourage collaboration and sharing.

For the seasoned participant, the difference in this year’s event was almost palpable. For starters, the tone of the initial hallway greetings and exchanges were noticeably different. Gone were the sometimes loud and ego driven outbursts of those anxious to share their successes with a competitor. Instead, the event was marked by a more subdued interaction of respect and reserve between the survivors of a great but debilitating event. Everyone seemed to understand that just being at Eagles this year represented a personal triumph.

This attitude permeated all three days of the event. Attendance was above 240, anumber which organizer Steve Murray of the Real Trends organization said was the best since 2005, a year that will certainly live in infamy.

Key discussion points during the conference were, of course, the questions of whether the recession is really over and is the housing market returning to healthy? The response was a mixed bag of cautious optimism and restrained relief. Intellectually the group was declaring a new era, but emotionally it was just more comfortable to stay in the hunker down mode. One was reminded of the classic scene in the movie Top Gun when hot pilot Maverick (played by Tom Cruise) responds to technical consultant Charlie’s (played by Kelly McGuire) question regarding how his evening of chasing women was going with the statement; “I don’t know, its too early yet, but so far it is looking really good.”

In fact, if one attended each of the carefully designed sessions, one would have gotten the message that, yes, the recession is over and the bad market is becoming healthy, but 2005 will fortunately not be happening again any time soon. The secondary message was that the current market may be within 5% of being the new normal and that if you are going to play in the next period this would be the time to make the necessary adjustments.

Another interesting observation that attendees made was the difference between those in attendance in 2010 and in 2005. The Eagle events of the late 1990’s and early 2000’s were characterized by the attendance of the big independent brokers from across the country. The programs were dominated by their self-confidence and the impression that they represented the ultimate practice of the real estate profession and that anyone not in compliance with those standards was doomed to failure.

These folks were not present at this year’s event. In their place was a whole new and vibrant cast of characters from the new real estate industry that has grown up over the past five to six years; younger executives and entrepreneurs who, in many cases, had taken over the senior firms were in attendance. Executives and operatives from the new brokerage business models like Rich Barton from Zillow were no longer freaks and mutants but had become mainstream experts. Faculty members who were sharing technology issues, no longer tortured participants by talking over their heads, but rather captured their attention by establishing how technology had become an essential element of profitability.

Gone also were the macho condemnations of innovative ideas for change and improvement that so often characterized the participation of the pioneer warriors. This year’s program offered a full range of insights into where virtually every segment of the industry is going. Almost every session experienced significant levels and intensity of questions as attendees earnestly sought to determine which combination of the new tricks, tools and strategies would best work for their firms.

Of the over 20 sessions the following deserved special mention:

The Billionaires’ Session: This program was packed and intense. Bruce Zipf, Michael Saunders, and Mark Woodroof comprised the panel, and Steve facilitated by starting off with an examination of the role of leadership in the new real estate industry. This was a theme that was to be repeated again and again over the three days. Bottom line – management and personality do not constitute leadership. Today’s successful brokerage firm must have real leadership to grow and prosper.

Jeremy Conaway shared a profile of the newest market influencing consumer know as the “New Affluent.” Conaway’s presentation made it clear that this is not the consumer of 2005 and that failure to understand this new participant would put real estate service providers at clear risk.

Allison James talked about the new virtual firm that bears his name and that in only a few months has grown to 400 agents in 12 states. The attendees listened respectfully and ask questions that reflected interest, if not a tad of disbelief.

Leading edge players Sherry Chris, Dave Colmar, Joan Docktor and Todd Hetherington talked about the evolving brokerage, and opened the attendees’ eyes with respect to the new realities of today’s real estate services environment. Colmar (A really bright guy) provided the attendees with invaluable benchmarking information with the results of his latest research.

Perhaps the most dramatic session of the program incorporated the collective wisdom of Alex Perriello, Margaret Kelly, Mark Willis and Pam O’Conner in the CEO Session. In what could only be called a gracious interaction, each shared what they believe their companies have learned over the last few years and what they believe will work over the next several years. Watching these leaders present, one could not help but be enthusiastic about the experiences that lie ahead.

Perhaps no session reflected the changing mind of the industry more than the recruiting program. Jon Cheplak and Hoby Hannah did fine jobs explaining the current state of the art. Keller Williams super star David Osborn captured the audiences’ imagination with his presentation of how recruiting has to be. This was a very rich session.

Winning in the “mind numbing” division was a program on Mergers, acquisitions and valuations by Nicolai Kolding, Ryan Gorman and Ryan Melone. These three dazzled their session’s attendees with a non-strop 90 minute stream of consciousness about acquisitions and valuations that could only be described as Olympian. This session should have been videoed and made mandatory viewing for every executive in the industry.

Speaking of Nicolai Kolding, this was his first Gathering since joining the Real Trends organization. His presentations and facilitations during the meeting clearly demonstrated that he will be a valuable and contributing member of the team over the years ahead; good head, great energy, outstanding team player. Great job dude.

Without question the most remarkable session of the meeting was the What’s Changed session featuring Rich Barton, Channing Dawson and Errol Samuelson. For ninety minutes, these three held the audience in an absolute trance as they reviewed and demonstrated how the industry has changed since their last “Gathering” presentation in 2008. Authentic, genuine, focused and informative, this was one of the clear “take home” sessions of the meeting. The trio worked well together, between themselves and with the audience. There was no intimidation or demeaning behaviors, just excitement, inspiration and motivation regarding the industry and transaction we are about to experience.

The Apple i-Pad was the probable winner in this session. The important point made by all was simple. You don’t buy an i-Pad for what you are doing now; you buy an i-Pad for what you should be doing. In a conference in which leadership kept coming up as the differentiator, the fact is that the i-Pad is a leadership technology. You don’t have to have one, but if you chose to abstain, you better figure out how else you can make the journey, because it’s not optional.

So the new Eagles have met for 2010 and it was, by all accounts, a class act across the board. What did we learn?

• The good news is that the recession and the down market may be over and that a new “normal” has arrived.

• The sharpening news is that the events of the past five years have created a whole new real estate services practice environment in which the consumer is in charge.

• The sobering news is that a significantly evolved brokerage business model will be required to succeed in this new business environment.

• The exciting news is that the experience that lies ahead will be more stimulating and rewarding than that which has brought us here today.

• The defining news is that leadership will be the defining skill set for the brokerage moving forward.

• The comforting news is that nobody in this industry knows how to capture its intrigue, its excitement or its potential like Steve Murray. Great job Steve. A learning time was had by all.

Each of these new industry player entrants will attempt to combine maximum technology, new service visions and the freedom that comes from not being burdened by the baggage of the old ways to create innovative and creative approaches to both the delivery of real estate services and the ultimate objective of driving revenues and profits

Each will be welcomed by the furtive glances and distrust of an industry that really doesn’t want to change but that is near the point of realization regarding the fact that the vast majority of what constitutes the traditional real estate service delivery model is no longer functional. Which one will win?  Film at eleven.

Enter eight-year real estate veteran Glenn Sanford from Bellingham, Washington. Glenn came of age during the dot-com period having been involved in a couple of technology start-ups and eventually started his real estate career as a sales person with Prudential Kelstrup in Bellingham in April 2002.  In 2004 he joined the Keller Williams market center in Bellingham and quickly became one of their top-selling agents.  In 2006 he actually ran the top team in Washington State and was ranked #49 Nationally.

“During my tenure with Prudential I quickly came to the conclusion that something wasn’t working with respect to the traditional model” said Sanford, “ the first clue was that nobody seemed to be happy about their role or their share of the commission dollars.  I subsequently affiliated with Keller Williams because it was obvious that they had really thought it out and had substantially improved many of the problem areas, especially in the area of team building, agent compensation and training.

“But after a while even in the rarified air of Keller Williams it became obvious to me that the business could be made better for all involved if innovation was taken a bit further.

It was then that he began to think about creating a brokerage business model that truly aligned revenue and profit expectations with business realities.

In October of 2009, Glenn launched his new venture, eXp Realty.  The operation, headquartered in a Bellingham executive center, is growing fast and has already expanded beyond the state of Washington into Oregon, California, Arizona, Texas, Indiana, Massachusetts, and New Hampshire.  Arkansas, Florida and Nevada are poised to open before summer.

The first point of departure for the eXp Vision is the fact that it is not organized as a franchise but rather it is configured to be a national real estate brokerage with divisions in each state run by a licensed broker who will be an employee of EXP.

“Ultimately it comes down to delivering an experience for both the agents as well as the consumers, and the unfortunate reality is that most prospective broker/owners are still entrenched in the old way of doing the business.  By operating as a national firm, rather then a franchisor, we feel that everyone should win and win faster.”

The crown jewel of the eXp organization is its four-pronged operational strategy.   First and foremost, the entire organization from top to bottom is paperless.  While some may find that adventurous, the fact is that many industry entities have already taken that step.  Interesting enough, the regulatory sector is leading the way in paperless technologies.  Many mortgage and title companies are also on board.  It seems to be the way to go.

The second jewel is that there are literally no bricks and mortar in the eXp operation.  “We spent a great deal of time evaluating the purpose of this relatively huge overhead item and were left with the sense that the only reason brokers continue to invest in bricks and mortar was due to the social nature of the real estate sales force” says Sanford, “Unfortunately a lot of productive agents tended to avoid the office and in some cases it turned out being a clubhouse for the unproductive.  However socially agents still needed access to other agents, brokers and staff.”  Ultimately agents who want an office can make the decision to rent one in the executive office suites that the company rents its own space from, however it doesn’t inventory space and those who don’t want an office are not forced to support one.  To replace the physical bricks and mortar footprints, eXp Realty refers to itself as an immersive firm where agents literally meet regularly in virtual space similar to a video game, though designed for business.  This provides the social learning environment typical of bricks and mortar, however, it is accessible whereever an agent may be.  So meeting with the broker, admin person or, for that matter, other agents is as simple as turning on your computer and launching the virtual office.”

The third jewel of the eXp business model is the agent revenue share program.  All agents start with an 80/20 split.  Agents who bring other agents into the operation share in their earnings.  In addition the Company, in theory, can share up to 100% of its gross revenues (Company $) with its agents based upon their engagement with growing and supporting the agent base.

“While I very much appreciated working within a profit sharing business model, it seemed to me that the bricks and mortar, as well as redundant staffing costs, was ultimately killing profitability and ultimately, in the current economy, the promise has been hard to deliver on.   Sharing based on gross revenues eliminates that shortcoming.”

The forth jewel of the eXp business model and the feature that, in the author’s mind, is most impressive and will have the most impact upon the industry, is eXp’s system for tracking transactions.  It is like an air traffic control system for transactions.  Transactions are reduced to automated check lists that can be tracked every step of the way from purchase agreement to post closing follow-up.

The vast majority of firms do not track either their agents or their transactions.  This system is simple and very visual.  If a transaction file is in compliance with the system, it reflects a green signal; if it isn’t, it reflects a red signal.  The most important part of the state broker’s responsibility is the tracking of this system.  Everyday, at a glance, the supervising broker can determine where every transaction is.  The closer that transaction comes to closing, the more insistent the system becomes with respect to compliance.

The system is an automated agent supervisor, a risk management system, a consumer satisfaction meter and a profit driver, all in one.  It uses a series of state specific checklists that ensure that wherever the transaction is located it is being constantly tracked.

eXp has also incorporated a “killer” on line lead generation system.  “We have both SEO and SEM tactics down to an absolute mastery,” says Sanford. However, the system is only available to agents who agree to play the “online” game the way the Company has determined it should be played.  Commission splits start at 52/48 with bonus points added for agents who maintain good social media practices and follow other Company requirements.

It is way to early to postulate whether Glenn Sanford’s vision for the future of residential real estate will be a winner or not.  But what has become clear is that, moving forward, the successful real estate brokerage business model of 2013 will have certain features.

• It will do everything possible to reduce and eliminate overhead and administrative items that have no sustainable business purpose.

• It will use technology and standardized service elements to drive absolute accountability with respect to ownership, management and service delivery.

• It will drive maximum revenues to those who are actually delivering services to the consumer, while at the same time driving market level ROI and profitability to those who are taking on the risks of ownership.

These are the lessons learned after five hard years in the crucible of the down real estate market.  This is the wisdom that will make residential real estate brokerage in the future the place to be.

We can do this.

This article appears in

Last month I had an opportunity to work with Brian Buffini and the Wells Fargo Home Mortgage team in a program called Meeting the Mortgage Challenge in 2010. I thought the program had great merit and I hope you will all forgive me for sharing both the experience and the message of that interaction.

The format of the program was a first for me.  It is called a “CineMeeting,” the name being drawn from the company that broadcasts live by satellite to theaters across the country. While the main production was staged at the Public Television studios in Chicago, it was broadcasted live by satellite to 60 theaters across the country, and reached a combined audience of over 28,000 REALTOR® guests.

I was struck by how incredibly professional the team was how detailed the production process was.   The day was like visiting another world.  It started at 6:30, when I was whisked away to the studios and taken through the process of preparing for a live satellite broadcast – a big departure from most days around my office.

Putting the whirlwind of production aside, I also want to share the serious side of the experience.  First of all, I was taken by the professionalism, knowledge and caring of the Wells Fargo team.  More specifically, I was impressed with Executive Vice President for Loan Servicing Mary Coffin and Executive Vice President and National Sales Manager Brad Blackwell.  These are two very impressive young executives who are very much into the current mortgage situation.  They were really focused on getting a specific message across regarding the seriousness that surrounds the current mortgage environment.  They noted that the mortgage conversation has three, not two, participants, pointing out the fact that the vast majority of mortgages are sold to an investor shortly after execution.

Literally hundreds of regulatory changes that have occurred in the mortgage process over the past year, they reported, and warned of more to come.  They talked about the fact that just their organization alone has hired over 7,000 new employees who will be tasked with helping to clean up the mess.  They shared the communication nightmares caused when the Administration announces mortgage benefits and solutions as if they were going to materialize in minutes.  In fact, the underlying regulations would take 6 to 8 weeks to draft, distribute and take effect, while, in the interim the very families they were supposed to protect are losing their homes.

Then they spoke, in grave terms, about the almost epidemic level of mortgage fraud that still exists, even in the short sale process.  Finally, they talked about all the work that would have to be completed to get the mortgage system back to being able to support the REALTOR® and the American families that want to shelter their children in a secure environment.

During one of the breaks, the conversation turned to the importance of teaching partnerships between mortgage professionals and REALTORS®.  The challenge of teaching both agents and consumers about the new world of mortgages, may be one of the most important elements standing in the way of a full market recovery.

It is sufficient to say that the dysfunctions, oddities and indeed vulgarities of the mortgage world of 2005 and 2006 are hopefully only distant history.  In their place is a industry where young executives like Mary and Brad are doing everything they can to make sure that funding is available to monetize the hard work of agents and fulfill the dreams of American families.  Yet, despite Mary and Brad’s best efforts, the mortgage process that survives this process, and the rules that will govern mortgages in the future, will bare few similarities to that which gave birth to the sub prime crisis of 2006.  In fact for the next several years it may more closely resemble the mortgage process of the late 1970’s.

So what is the message here?  Let’s start with the fact that funding real estate transactions must be on the top of everyone’s priority list.  Interestingly enough, the first step of that challenge will be to ensure that REALTORS® themselves understand the new mortgage rules at a level that allows them to explain to their clients how the new systems work.   The second step is to ensure that consumers are prepared for what they may have to go through in order to qualify, so that they don’t end up angry and dissatisfied with their agent, and a system, which is still pretty reasonable considering all that it has gone through.

Brokers should immediately undertake to meet these challenges by working with responsible and educated members of the mortgage community.  It is essential that agents not only understand the changes that have already been made but, of equal importance, that they understand the changes that might yet occur, as they occur, rather than months later.

We share our real estate marketplace with a number of other professionals.  This is a time to put aside past unhappiness and work together to give the American consumer the sense of confidence they deserve and, given the reality of today’s market, will probably demand before those closing documents have been signed.

We can do this.

It was a classic Keller Williams moment. The announcement was delivered at a key juncture during the Company’s annual Family Reunion event, in the middle of CEO Mark Willis’s annual State of the Company presentation.

For those who have never attended the reunion event, it is very difficult to describe. There is simply no other professional conference in the industry that even comes close to delivering the anticipation, the passion, the excitement and indeed the satisfaction that comes with this annual celebration of success and achievement.

Each element of the conference creates an opportunity to highlight a specific company or cultural value. The first morning leads off with a celebration of the future with founder and Chairman Gary Keller’s vision of the industry and the marketplace. The second morning includes a report of the achievements of the past year, in the form of CEO Mark Willis’ State of the Company address, building pride and excitement with respect to these achievements. The third morning features a keynote presentation, this year it was Kevin Carroll who taught the group the lesson of the red ball. Finally, on the fourth morning, it is time for the revered Inspirational Breakfast where Chair Emeritus Mo Anderson sends departing attendees home with a message of hope and focus on what is really important.

For each of these four sessions, and for the over 60 educational and training sessions throughout the week, the immediate challenge is just being there. The Reunion event is the only industry meeting that comes complete with a “seat savingpolicy.” Lesson one: at a Keller Williams Family Reunion, shopping, golf, and the pool are simply not part of the program. At each session throughout the event, the observer finds a red clad overflow crowd, eagerly awaiting the opportunity to be motivated, educated and inspired. The air is alive with the spirit.

The announcement, when it came, seemed, for just a second, like just one more achievement in a long series of corporate achievements in 2009, the latest in what has become an impressive chain of notable years for the KW organization. But then the reality of the news hit home and the crowd went wild. In 2009, Keller Williams passed RE/MAX by virtue of agent count and became the third largest real estate franchisor in the country. The excitement shot across the crowd of 9,000 passionate KW participants like a rocket in a tunnel. As if the unbridled roar of the 9,000 wasn’t sufficient, the screams of pyrotechnics released skyward from the floor of the venue at the New Orleans convention center further emphasized the moment.

KW CEO, Mark Willis, completed his comments with the following point. In setting KW’s next objective and discussing the distance between number three and number two in the industry, he pointed out that number two is just fifteen minutes away. If every KW executive and team leader works just 15 minutes longer each day, a year from now KW will be number two.

While many will roll their eyes and chose to ignore the relevance of this historic moment, the fact is that it was huge for both KW and the industry as a whole. Keller Williams is not just another traditional organization that had a great year, or even four great years.

Keller Williams is an organization that came into this industry over a decade ago with a very clear vision of what the traditional brokerage business model needed to evolve into, and they have never wavered in their commitment to that model. Keller Williams reached its current position by delivering a message of agent quality and brokerage financial viability, and has never once compromised on those values. Keller Williams, from the very beginning, believed that a successful real estate brokerage could, and should, take care of everyone in the organization. They have almost religiously met that belief every day since.

Most everyone in our industry, who has tried something new, has been soundly criticized for rocking the traditional boat. For Keller Williams, that treatment has seemed somehow more personal. Suggestions that the Company’s innovative agent revenue model was a “pyramid scheme”, or that the Company’s intense commitment to a culture of quality and ethical behavior made it a “cult”, remained common for most of its history.

In February 2010, all of that changed. Keller Williams has emerged as a major player, with ideas, features and concepts that work in today’s rapidly transitioning industry environment. Moreover, in an industry where the big players are almost universally losing the battle of leadership, innovation and solvency, KW has continued to grow and has remained profitable throughout the past four years without debt or doubt.

Our industry is in an unparalleled learning period. What is there for all of us learn, about the Keller Williams model, that many have found so intimidating? Actually it is quite simple:

• Everyone needs to win
• Integrity, honesty and trust are the key to success, so do the right thing
• Be consumer centric
• Profitability is to business what integrity is to the individual
• Be committed, this is a long term proposition
• Innovation and creativity are the key to future success
• It is all about being on a team
• It is people who make things work out right, not brands

These lessons are not just valuable for building a great real estate company. They offer wisdom and guidance for rebuilding our industry as well. This time around lets learn from everyone in the industry who has something to teach us.

Next month, we will start with a review of some of the “new idea” company’s currently coming into our industry. The first will be EXP Realty out of Bellingham, Washington. In the meantime how are you going to spend your “fifteen minutes” in 2010?

This article was written for, and is scheduled to appear in RealTrends Magazine (www.realtrends.com).

So how are we doing with this objective? How many brokerages have adopted consumer centricity policies or guidelines? How many firms are using internal or external resources to track consumer behaviors in their marketplace? How many brokerages are downloading their agents relative to the demands, preferences and expectations being articulated by their customers every day, in every way.

A recent poll of 72 brokerages, conducted by RECON Intelligence Services, suggests that while the industry is saying that it understands the need to be consumer centric, its behavior suggests a slightly less aggressive posture. Only fifteen of the firms surveyed indicated that they were collecting data from their agents. Only 22 indicated that they were monitoring external sources and/or sharing/reporting information regarding changing consumer behaviors to their agent panels. This result carries dire consequences for an industry that is currently vulnerable to the whims and perspectives of a consumer who continues to have a less than positive sense regarding real estate professionals.

A number of firms and organizations within the industry, which lay claim to an active consumer interactive program, use surveys to generate their numbers. Oops. A consumer survey makes a very negative statement regarding the firm’s knowledge regarding how to listen to consumers in 2010. It’s a major part of the challenge. Consumers are changing everything in the business equation. If you aren’t following your consumers, you might not know that “listening” has replaced surveying as the number one exchange media.

Consumers have grown wise to the fact that the real skill set in surveying isn’tcommunications, but rather in crafting a surveying instrument that will generate the result sought by the surveyor. In other words, today’s consumer is not interested in having someone put words into their mouth. They feel totally competent in expressing their opinions, preferences and demands without the assistance of some sharp witted researcher who can design a survey question that sounds remotely like; “when did you stop beating your spouse?”

Marketing staff, across the industry, continue to complain that consumers and insiders refuse to participate in their survey processes. All too frequently, this failure to respond is interpreted as proof that the consumer or insider simply has nothing to say. Obviously it is quite the opposite. They do have something to say and they want to say it in their own words.

There is a new solution for brokers, brokerage executives and managers who wish to transition into the “new wisdom” relative to the finding out what their customers are thinking, preferring and demanding.

The Advertising Research Foundation (ARF) recently published a book entitled “Foundations of Listening.” A quick read for those responsible for understanding consumers, the book sets forth the current art of listening, complete with excellent case studies. Traditional marketers need not panic however. After seeming to commit itself to a new way of interacting with consumers, the book concludes by pointing out that the old time survey still has its place when it is clearly and perceptibly unbiased.

The fact is that millions of real estate consumers are freely giving their opinions and senses about a massive range of real estate experience issues. This speaks volumes about both their need to be heard and the brokerage’s need to hear them.

The world of social media has gifted the real estate industry with an avalanche of consumer opinion and preference. The only question is whether the industry wants to tap into this wealth. The first step to asking the question is recognizing that this stream of consciousness is a blessing, not a curse. It is a gift, not a burden. It is our customers caring enough to share with us how they feel about the current brokerage value proposition and experience.

If this message catches your attention, set about the process of establishing a consumer listening program in your brokerage. Carefully monitor social media for comments regarding your agents and services. Use your blogs to comment on your value proposition and then carefully listen to consumer response. Take advantage of Linkedin, Twitter, Facebook, MySpace, Ming, Bebo, BigTent and Geni.com.

Set up a system to capture and categorize what you are hearing from your consumers. Convert that information into improved services and value. Use the same social media channels to report back to consumers relative to your response and solutions. Use the whole system to create powerful consumer-brokerage relationships. Encourage your customers to rate your services, remembering that rating is the new advertising.

This is exciting stuff. It moves brokerage management from a reliance on anecdotal stories, guess work and incomplete conclusions to an exacting science of listening, analysis and action based upon the known. This is our destiny and we can do it.

1. Real Estate Information Symposium (REIS), March 29-31, 2010 – see www.HAR.com/REIS

2. NAR Game Changers presentations at AEI, April 19, 2010

3. NAR Game Changers presentations at Mid-year Meetings, May 12, 2010