Is there a value crisis in the real estate industry? According to Larry D. Romito, president and CEO of Quality Service Certification, Inc., there is. He says that consumers believe they are paying way too much in brokerage fees for the service they get, particularly the higher they go in price for a home.

"The process of buying and selling a home is unclear and mysterious," says Romito, "The steps aren't part of a process that the individual practitioner can follow, so many make it up as they go along, but for the consumer there is a price expectation continuum, from inexpensive to expensive. As the consumer moves toward expensive, they expect more. Part of expecting more is consistency, reliability, accountability, and responsiveness. This is true for all products and services.

Romito says he knows this from hundreds of surveys and focus groups, that validates what his company is doing - training agents to provide sterling service. One statistic he throws out is startling. "In a normal real estate market, only about 60 percent of homes listed sell with the firm that originally listed them. That's a low batting average, says Romito. "And the practices that would lead to a better batting average simply aren't being followed.

In Romito's mind, service can be produced in the same way a manufacturer fabricates a product. "When we talk about most of the products that we buy today, most people feel we are getting good quality and pricing. The manufacturing process has accountabilty, a consistent and reliable product. On the service side, service industries have not embraced systems and processes and accountability in the same way manufacturing has."

But that can change. Consumers are saying they want more and that makes service a serious business. "60 percent of global economy is service based," says Romito, "Consequently, the happy-go-lucky, improvisational approach that many Realtors have doesn't cut it any more. They need serious systems, processes and accountability."

The real estate business has less systems than other service-oriented industries because it leaves service and personal accountability up to independent contractors. The infrastructure has not been defined and developed which includes recognition, rewards and awards for excellent customer service. Recognition and rewards are reserved for those who produce, not those who please.

"Where the industry has excelled is in customer acquisition and doing deals," says Romito. "It has not excelled in serving consumers. How do you measure service? Satisfaction. How can you manage service with the same level of confidence as you can with a product?

"If we were manufacturing pens, and went to a board of directors to approve a system where we make and sell as many pens as we can, and that our compensation goes up based on our production numbers, and it doesn't matter how many break or leak ink all over consumers, no board would approve that," claims Romito. "In the real world, boards look at maximizing production and minimizing defect and failure rates.

"In real estate, we look at productivity maximization without any systems for quality control, with few systems for customer feedback. Those that do provide feedback are usually self-serving. We don't reward the quality side of service. That is a huge threat to business because in the world that is emerging new people aren't caught up with our traditions.

"We look at the world from the inside out. We look at what's good for ourselves and not at what is good for the consumer. Most other industries that are thriving are consumer-driven. They have reorganized to meet the needs of the consumers."

An example? "Call a real estate office for service and in many cases you won't get assistance because that information is funneled through the agent. A conscious decision is made to place the needs of the listing agent first and the needs of customers second or third. We understand why that is done, but any organization who makes the decision to put someone in line in front of the consumer first is taking a risk," admonishes Romito.

Published: November 24, 2000

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.