Realtor or real estate agent- What's the Difference?

Most people who are not in the real estate industry don't even realize that there is a difference between a real estate agent and a Realtor. Realtor (pronounced Real-tor with two syllables) is such a common term that most people just assume all agents are Realtors, which is not the case.

A real estate agent is someone who has gone through the required schooling and passed a test to gain their license to sell real estate. This usually requires 90-120 hours of class time, followed by a test with the school and then a test with the state. After which you are deemed an "expert" in real estate.

A Realtor is a real estate agent who has joined the National Association of Realtors (NAR). This means they have gone through some ethics training and have subscribed to a set of rules called the 'code of ethics'. And they have to pay dues, of course. ((See video))

So what's the difference?

Well, let's start with the question, why would a sales agent not want to be a Realtor?

Is it because they don't want to pay dues? A few hundred dollars a year shouldn't be too much for someone who is good at what they do.

Or is it because they don't want to abide by the code of ethics? This seems a more reasonable assumption, given that the state and national associations have committees to hear grievances and hold the members accountable for their actions. And these committees operate separately from the state divisions and can hand down discipline when appropriate.

Also, when considering the fact that your agent will be representing you and your financial interests in such a large investment, wouldn't you want to work with someone who has taken that extra step to be accountable and go through that ethics training? ((See Video))

NAR also has a political action arm called the Realtors Political Action Committee (RPAC). RPAC fights and lobbies for property rights and those politicians who would support property rights. I think this is one of the most important roles of NAR.

One reason to join NAR is so you can be a part of RPAC and help to protect the rights of individuals who own property, including fighting Eminent Domain, which is the power of a government to take private property for public use; the 5th Amendment of the US Constitution and articles in many state constitutions allow this practice provided that just compensation is made. For more information, see the Eminent Domain Watch.

There are differences between real estate agents and Realtors and I invite anyone to research for yourself and determine which you would rather have working with you.

Inman Innovator Awards- WTF?

With any awards announcement there will be debate and discussion, agreement and disbelief, and the Inman Innovator Awards (winners announced last week) are no different. I think some of their choices were either politically driven, or just they screwed up.

For instance;

Most Innovative Brokerage/Franchise/Realtor- and the winner is...

Re/Max

(crickets chirping)


Are you kidding me? Re/max is the most innovative brokerage? In what way? They just recently included all broker listings on remax.com (about two years after everyone else did). This pick has got to be political because it's really stupid.

The founder and chairman of Re/Max, Dave Liniger just said that the internet is overvalued- and this is the most innovative company?


My pick would be ZipRealty- The have been cutting edge since inception. There are things about Zip that I don't like, but they are very innovative.


Most Innovative Technology- and the winner is...

CellSigns

This product is fine- it will send a text message to the agent's cell phone when a buyer calls on their for sale sign. Companies have been sending the callers phone number to the agents for over a decade. How can this possibly be the most innovative product they could find?

If lead generation tools are what they're looking for, why not leadalarm? This service will convert an email lead into voice and then call your cell phone immediately, and allow you to be instantly connected to that lead.

Inman gave it to NRT's Leadrouter a year or two ago and LeadRouter doesn't connect the agent to the lead. It just gives you the information (and then you have to be frustrated trying to keep the system satisfied with updates).

Or what about Redfin's mapping system? Everyone's got a map now, including BlueRoof, but Redfin's is smoother, richer, and the information around it is better than anyone else's by far. The technology they built is far superior to CellSigns.


Innovator of the Year- and the winner is...

Mark Lesswing, Vice President, National Association of REALTORS

This has got to be a political award- last year they gave it to Earl Lee from Prudential. And this year it goes to NAR's tech guy? Give me a break!

In 2006 no one person brought more innovation into the industry directly or indirectly than Rich Barton of Zillow.

I don't think Zillow is that wonderful- yet. Right now I think it's just a fun way of checking out other people's homes, but the anticipation of it and the excitement it brought to the tech world and the real estate world shouldn't be overlooked. Plus the innovation of Zillow is undeniable. Talk about a grand endeavor.

Rich: I want to get into real estate

Listener: That might be interesting. What would you do?

Rich: Create a database of every residential property in the country, giving an estimate of the properties worth and projections about it's potential worth.

Listener: ... uh, yeah... okay Rich. I need to go now. Good luck with that.


Hey, I like to think of myself as a visionary and I have moments of inspiration, but Rich Barton has inspired millions of real estate and tech people to drive themselves harder to be more innovative. He deserves the award- period.


As I said, any award will be questioned and complained about... but that doesn't mean I'm wrong.

For Sale By Owner Help from Realtors?

My second week in the business I went to lunch with some experienced agents who each gave me their advise on how to be successful as a rookie and unanimously I was told to stay away from For Sale By Owner (FSBO) sellers because these were people who were very different. I was told these people were mean to agents and even when they did eventually list they were difficult to work with. I asked these agents how many of them worked with FSBO sellers trying to get listings and none of them did. They all stayed away from them and worked other sources.

I saw an opportunity. I figured if these agents weren't talking to FSBO sellers then I should. Over the years most of the listings I took have been FSBO sellers who eventually got tired of trying to sell on their own and listed with me. And I have learned to understand them, and their challenges, more and more. Most people who attempt to sell their own home do end up listing with an agent. Why is this?

To begin, almost all the buyers are working with an agent, and why not- it doesn't cost the buyer anything for this representation- and most real estate agents won't show FSBO homes. They don't show these homes for a few reasons.

First, it's much easier and effective to go to the MLS and do a detailed search of exactly what their buyers are looking for.

Second, with the MLS the agent knows they will be paid a commission by selling a home and with a FSBO they have no idea if the seller is willing to pay them.

And pride is a factor- Realtors want to support their trade.

It can also be costly to sell a home. According to the National Association of Realtors, here is how FSBO's market their homes.

Yard sign: 63%
Newspaper advertisement: 44%
Open house: 33%
Friends / neighbors / relatives: 25%
Internet: 24%
Direct mail (flyers, postcards,etc.): 6%
For-Sale-By-Owner magazine: 6%
Television: 1%
Other: 9%
Source: 2004 Profile of Buyers & Sellers, (NATIONAL ASSOCIATION OF REALTORS® - Research, 2004).

Some of these numbers are changing now with the internet becoming so dynamic and accepted as a marketing forum, but it can be an expensive (and tedious) task.


So where does this leave the buyer who hasn't been able to find the right home with their agent? Many times they settle for something they don't like as much, other times they look without their agent at FSBO properties and end up having to go through the process alone, and some times they can find a FSBO home with an agent, and then the agent needs to worry about whether or not they'll be paid for their time.

BlueRoof can help. We have every listed property, from every brokerage- and all the virtual tours that are posted on the MLS. And we also have FSBO homes. We also allow FSBO sellers to identify if they are "Agent Friendly", meaning they are willing to pay a buyer agent a commission if they bring the buyer.

And the service is free.

This can help the FSBO sellers by exposing their property to more potential buyers, it helps the buyer by giving them more homes to see, and it helps the agent by giving them a searchable database of homes where the seller has already agreed to pay to a commission. And to place a home FSBO a seller only needs to register (for free) with an email address. We don't require you to committ to anything like ZIPRealty (who just started their new FSBO program) and other FSBO sites do.

When a buyer makes an offer to buy a FSBO home on the BlueRoof website- that offer is sent directly to the seller, who can then respond to the offer, which is sent directly back to the buyer. Once acceptance occurs, the offer details are sent to BllueRoof and an agent will contact both sides and ask if they would like our representation coordinating the transaction. If they do, we will help both sides all the way through closing for only $1000 total. If an agent brings a buyer to a FSBO property on our site, we will also represent that seller from offer on- for that same $1000.

In the market that Utah is in right now more people are trying to sell FSBO. Sure, most of them will probably end up listing with an agent, but until then we'll help best we can.

BlueRoof is not a technology company

There are some incredible innovations and new technologies coming into the real estate industry right now. And there are some creative and exciting people coming into the business who are helping to change the landscape of it. At the Inman Connect conference last week I really enjoyed meeting more of these people and having the opportunity to share some ideas and thoughts with them.

But there are differences between some of the new real estate models and BlueRoof. Of the most significant is that most of these new companies are tech people who are entering the real estate space and BlueRoof is a company of Realtors who are utilizing technology.

That is an important clarification to me. So what's the difference?

Real estate, and more specifically, being a Realtor is about a few fundamental things to me. It is about protecting property rights, fighting for political issues that effect property owners, it is about agency and representation, and it is about helping people buy and sell property with confidence. And it's about being a resource for people with regard to real estate related matters.

Being a tech company who's earnings come from property sales and/or lead generation is not the same. Some functions are similar, but they are not the same.

It is my opinion that the influx of new technology will ultimately benefit the consumer and bring more transparency to a historically opaque industry. And frankly, the industry needs cleansing. There are too many crappy agents out there simply taking the low-hanging fruit and diluting the reputations and perceived value of good agents. Many of these agents hide behind respected industry names, but a franchise is just an independent with a familiar logo- the person is what makes the agent- not the company name. This is a topic for another blog that can devoted to it, but you get the point.

There are some pretty cool things that we're going to be doing with our site and some new technology in the near future and I'm excited to see it happen, but at the very center of BlueRoof is our commitment to the consumer, our clients, and being Realtors.

Competition in Real Estate

The Department of Justice has been looking into the real estate industry to determine if fair competition exists. It started last September when the DOJ sued the National Association of Realtors (NAR) over a policy called "opt out", where brokers could choose to not include their home listings on other brokers internet sites. The DOJ feels that some brokers might choose this route as a way to push new internet-driven brokerages out of business.

Last week congress held a subcommittee meeting entitled, "The Changing Real Estate Market" and heard different points of view about the nature of competition in the industry. As expected, NAR's position is that there is plenty of competition in the industry and the consumer will ultimately dictate which companies survive and become successful based on their services and business model. Others argued that large traditional brokerages aren't playing fair and create a hostile environment for anyone trying to get into the industry if they don't conform to the traditional way of doing business. And both sides are right.

Here is how I see it-

There is a ton of competition in the industry. Millions of Realtors all competing for the same business. There are a lot of different companies with different business models and commission structures. New innovative business models (like BlueRoof) have to be strong enough to stand up to traditional brokerages, who don't like them doing the same things for less, or even worse, doing better things.

Historically, new models have been torn apart, pushed out of business, or just held down as much as possible by brokerages and agents who don't want their commissions eroded. I used to be in that same mindset when I was with Coldwell Banker and Prudential and GMAC.

Having competition that doesn't like what you are doing is not always a bad thing. It drives you to be better and it can push some companies to think more creativitely- and this is good for the consumer.

The real estate industry is evolving and this is a very good thing. The consumer today is more educated about the process and wants a better value proposition. And they are increasingly demanding better service and flexible commissions and really, who can blame them?

Realtors have an important place in our society as a resource and representatives and if we focus on that I think our value will go up.

Avenues Charmer- Most Viewed on BlueRoof Last Week

This Home at 515 North E Street (500 East) in the Avenues of Salt Lake City was the most viewed home on BlueRoof last week. It's offered for $379,000 and has 2300 total square feet.

It's listed with Christine M Ashton of M.D. Realty, LLC. Christine's contact phone number is 801-521-8223 and her email address is krissyashton@aol.com.

Her comments are:

REDUCED $5,000. Absolutely charming home for sale. There is a detached apartment included on this property. Main house has 3bedrooms and 2 full baths, the apt is the other bedroom and full bath. Jetted tub. Central Air and much more.

And the avenues is a great area to live in- close to downtown, shopping, and a lot of good restaurants. If you have any questions you may want to contact Christine.

Carnival of Real Estate

I forgot to mention this on the blog two weeks ago and this last week I was in San Francisco all week for the conference, but Zillow started a blog carnival for real estate two weeks ago. If you are unfamiliar with a blog carnival - here is Wikipedia's definition,

"A blog article that contains links to other articles covering a specific topic. Most blog carnivals are hosted by a rotating list of frequent contributors to the carnival, and serve to both generate new posts by contributors and highlight new bloggers posting matter in that subject area."

Last week Searchlight Crusade hosted the carnival and our post was named the "Pick of the Week".

Next one will be hosted by Future of Real Estate Marketing blog, look for it tomorrow (Monday).

We'll be hosting the carnival here on our blog September 18th so watch for it then.