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Response To: But Agents Do Have Power (OurBroker - 07/07/2001 04:52 PM)
Main Topic:

Can A Union Help Fight Lowered Commissions?


From Netwars To Agent Power
Posted By: Sam Valenti - 07/07/2001 09:01 PM

Peter, I will try to narrowcast my answers to better address your questions. One of your questions was, in a union shop what is it that agents want that they now lack? The short answer is, a voice, and the power to forge that voice into decision making that affects our future. I believe that it is the hard fought forging of voices into workable policy that represents (our) broker and agent best interests. Today, brokers, especially mega-brokers, dominate the policy making at NAR, and administrative "conformity," actionizes the narrowly controlled decisions. Example:

1. Affinity Marketing, the practice of rebating commissions to unlicensed persons through an intermediary such as a relocation company or a retailer such as Costco is not in an agents best interest. It directly reduces the commission an agent receives. In addition the money leaves the real estate industry ultimately reducing the commission pie. NAR claimed not to take a position on this matter but it's silence was deafening. Ultimately the truth emerged in the NAR supported policy of "One Stop Shopping." One Stop Shopping is just another form of Affinity Marketing in that it requires Lenders, Title Companies, Inspection Companies, Insurance Companies and others, to reduce their fees to the Real Estate Company that then in-turn pays a portion of the reduced fees to the consumer. Often the real estate company owns all of, or a part of, one or more of the service companies, title and Mortgage companies being the most common. One-Stop-Shopping is not in the consumers best interest because it limits consumer choice and therefore will lead to higher pricing. It is not in the agents best interest because it limits the agents ability, to some degree, to offer superior choices in both price and service to the consumer. The best buy is not always the lowest price. A smooth transaction uninterrupted by functionaries of a one-stop-shop who may not be the best choice, is worth a great deal to both the agent and consumer, and leads to happy clients and future referrals. With one-stop-shopping the company becomes the center of the transaction, not the agent. Will a union help this situation? I believe the answer is yes. Why? Because win-win relations are important and do not now exist.

Example: Realtor.com features a forum entitled One Realtor Place. Within One Realtor Place exists a number of sub-forums. The Observation Deck is one of the sub-forums where agent discussion of affinity marketing and one-stop-shopping took place. The great majority of agents who posted to these subjects were critical of NAR decision making. With the technology in place it would have been very easy to sample agent and broker opinion concerning these issues which are very important to agents. Instead, agent opinions were ignored and policy making took place in a clearly one sided fashion. Large brokers influenced the outcomes. Whereas a union, lets refer to it as a Cyberunion, would balance the equation. A few traits of the new Cyberunion would be: 1) It employs internet tools to regularly survey members concerning their views on important policy decisions, 2)It replaces old communication methods with new tools such as forums, listservers, and email, for more efficient communications, 3) It makes all of it's officers and staffers immediately accessible through email and chat sessions. This Cyberunion model is a decentralized model of direct Democracy. It is very likely that the Cyberunion model, if it had been in existence at the time, would have defeated the idea of one-stop-shopping and we would not be faced with the retaliation of the Banking Industry today which threatens to transform the real estate industry. Other issues important to agents are internal commission splits, multiple business models, timely payment, internal policy making, open books, conflict resolution, raising productivity, controlling costs, controlling overhead and expenses are just a few of the many concerns that agents have which are mostly not provided to them today.

Post modern leadership styles require a leveling of relationships and a tearing down of barriers. The establishment of a multi- directional communication and decision making dynamic are essential to the proper functioning of a modern real estate company in hyperculture. Since agent concerns have been ignored by policymakers, agents have every right, and I believe a responsibility, to make their voices heard. The existing netwars will lead to agent empowerment either through a new agent organization or a cyberunion. Speed spikes complexity. Brokers must learn about organizational structure and management of professional talent for the new age or face a serious derailing as the pace of change accelerates, otherwise agent cyberunions will do it for them. Other non-union agent-centered models will emerge as well.

I could not begin to address all of your questions because of the length of the responses.
There are so many other factors that integrate into this discussion that key idea clusters would have to be introduced just for brevity. Since this friendly discussion has just been between the two of us it appears that the subject is not resonating much at this time. I do appreciate your thoughtful responses and agree with many of your statements, especially that working toward healthy broker agent economics is a worthy goal.

Have a good evening.

Sam Valenti




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