Wednesday, January 27, 2010

Competition is good but Competence is better

There are some debates out there about raising the bar for real estate professionals. I run a successful real estate brokerage with very professional agents who are good at what they do. Furthermore, my business model relies on my ability to grow and attract talent to our company. So the more agents who can get their license, the better off I will be. Right? WRONG!!! But the more agents consumers can choose from, the better off they will be. Right? WRONG!!!

Between 2002-2006 our industry went through a major growth spurt. Real estate became a very attractive profession for some very unprofessional individuals. Some will argue that the easier it is to obtain a real estate license, the more competition their will be in the marketplace. Therefore, the consumer will get the best price for service and everything else will be fine.

Here is what really happen: Due to massive competition some buyers and sellers were able to save on real estate commissions upfront. However, many of these buyers and sellers are feeling the pain of a massive long term financial mistake. This is what we call penny wise and pound foolish.

Yes competition is a great thing. However, many consumers trust that the local licensing boards have set the bar high enough that any real estate licensee they choose, will be a good one. The current market situation is showing everyone that not all real estate licensee are experienced and equipped to represent their clients properly.

So lets correct the assumptions: The more COMPETENT agents consumers can choose from, the better off they will be. Right? Absolutely