For many
years, there has been an ongoing debate about the subject of transparency in
real estate. What do I mean by
“transparency in real estate”?
If you are
attempting to evaluate the worth of a Major League shortstop, there is publicly
available data that will give you some indication of what kind of player you
are looking at.
For example,
if you compare the lifetime statistics for Derek Jeter and Troy Tulowitzki,
you’ll see something like this:
PLAYER Career Games Played AVG HR's RBI
D. JETER 2,585 .313 255 1,254
T. TULOWITZKI 744 .292 130 470
From these
numbers, you can have a legitimate discussion about which player has performed better during the course of his career, which player has more upside, and whether one would be a smarter pick than the other if you were starting up your own Major League Baseball franchise.
In real
estate, there is no such tool for comparison.
In large
part, this is because Realtors themselves do not want you to know how much (or
how little) they sell, where it’s located, and what it cost.
I have argued
against this line of thinking for years… of course, that’s because my
production puts me in the top 10% of agents, which means 90% of the agent
population is automatically not going to like my numbers (or theirs) being
public.
Realtors pay
a lot of money to belong to NAR (National Association of Realtors), and they
also pay a lot of money to be part of a local Board of Realtors. These boards exist to act upon the will of
their membership, and if 70% of agents don’t want their numbers out there, then
the numbers are not going to be out there.
But this is
wrong. It’s easy to argue that the
decision about whom to hire to help you buy or sell your life’s most important
investment is far, far more important than whether Derek Jeter or Troy
Tulowitzki is the better shortstop… but the consumer will never know a fraction
of what’s readily available about Major League shortstops when it comes to
choosing a real estate practitioner.
One year ago,
a company called Redfin made a bold play when they decided to independently
mine regional MLS systems for agent production data and publish the results. That data, posted on their website under the header “Redfin Agent Scouting
Reports”, caused an immediate panic in the industry. Within three days, under intense pressure from its membership, most
MLS systems either terminated access to Redfin altogether or promised to do so if the Agent Scorecard function wasn't shut down at once.
Threatened
with an immediate loss of access to its most prized commodity - MLS property listings - Redfin backed down. Agent
Scorecard quickly vanished and individual agent sales data went back under cover of darkness once again.
So what can
a consumer do to when it comes to finding a qualified, competent agent?
Word-of-mouth
referrals have always been a good, if unscientific, way to screen agents. Advertising and neighborhood presence can
also be used as benchmarks… but none of these really allow you to peek behind
the curtain, to see what others have experienced.
Later this
week I’ll let you know how I’m trying to address this issue, at least as far as
my production data is concerned.
Check back Friday for that post.
