I don’t think Jay Thompson has ever gon…

I don’t think Jay Thompson has ever gone on a boring rant, so it’s always interesting to see what gets his blood boiling. And when the topic at hand touches on the current meme of real estate agent professionalism, all the better!

Today it is that some North Carolina REALTORS who are protesting a new rule that protects homebuyers by disclosing compensation… Where Jay comes to the stunningly simple solution: “tell people what the costs are in buying a home, which includes agent/broker compensation and incentives – before they purchase a home.”

And if you missed Kris Berg’s take on professionalism, then run, don’t walk, to:

Is professionalism in real estate overra…

Is professionalism in real estate overrated?

The real estate zebra clearly things so… but I have to totally disagree.

But before I talk real estate, it’s worth talking about my experience as a licensed transportation engineer, where I never remember hearing anyone debate the value of “professionals.” Among the many different types of projects I worked on were signal design projects, where a dumb design mistake (bad signage, lack of sight distance, non-standard turning radiuses, etc.) can easily (and often do) lead to accidents, deaths and lawsuits. At my consulting firm, every project was overseen and actively reviewed by a principal of the company. The principal was not only licensed, but had years (almost all had at least a dozen years) of licensed experience. In other words, ever after an engineer became licensed (which involved a multi-day test!), they wouldn’t be able to approve final designs until they had years more experience. And far from being the exception, that was how every transportation engineering consulting firm (at least that I was aware of) operated… and it resulted in an industry that generally has a very good reputation with their clients (who are generally city and state governments)… Like any industry, consulting firms are often selected based on price, but the risk of sacrificing quality has been mitigated by the fact that there’s such a strong professional ethic within the engineering industry.

Compare that to the real estate industry where the barriers to entry are so much lower and the quality reviews so much more infrequent. The industry often portrays itself as “professionals” who are always looking out for the best interest of their clients (and most real estate agents are), but there are enough incompetent “bad apples” in any given market that there’s widespread distrust among consumers.

Daniel makes an extremely valid point that on any given transaction, industry-wide “professionalism” doesn’t matter much, as it’s the professionalism of the individual agent that determines if the client is satisfied. And when we sold our Seattle house, Ardell represented us, so I was able to feel more than confident that our agent was looking out for our best interests.

However, it totally misses the issue of widespread consumer distrust of the industry in general. (Want to see some distrust among consumers? Check out this post on RCG.) Unless/until the industry can do a better job removing the bad apples who are just around to make a quick transaction (ethical or otherwise), I would argue that the real danger is consumers, especially consumers who don’t already have a trusted advisor, will be more than happy to seek out and use alternative business models that differentiate themselves only on price.

[cc photo credit: One bad apple]