Welcome to my world: an insider’s tough-love look at real estate.
Disillusion can become itself an illusion.
T.S. Elliot, The Cocktail Party
By "tough love", you might expect this to be a no-holds-barred look at real estate. And you’d be right.
You might also expect this to be a kiss-and-tell expose of the real estate industry. Ten Things Your Realtor Won't Tell You. And there you’d be wrong. I'll leave fanning the flames of prejudice and confirming the ignorance of conventional wisdom to the fast-buck artists already mining that vein.
No, this is better. This is the full story, as much as I know of it, as impartially told as I can, from the forward trenches of real estate.
I’m not an academic, peering at real estate through the wrong end of my telescope. I’m not a retread financial writer covering the fad of the moment while I hold my nose and wait for the stock market to get interesting again (and with the DJIA briefly crossing 14,000, I'm hopeful that the stock market is interesting again). I'm not a blogging hobbyist, duct-taping a belief system together from random scraps off the Internet and random encounters at open houses.
Real estate is my business. Real estate is a legitimate business, with complexities and nuances far beyond virtually every outsider, no matter how smoking his blog, how distinguished his curriculum vitae or how credible the media outlet she reports for.
That's scary, not just because the real estate consumer winds up ill- and mis-informed, but for its implications. Extrapolate the superficial, agenda-driven reporting of and punditry on real estate to every topic, large or small, and you should find yourself wondering if any professional explainer has anything worthwhile to tell you about anything. What if it's not just real estate that trips them up? What if every topic more complicated than a four-alarm fire is beyond the comprehension of the people who explain events?
Admittedly, there's plenty wrong with how America buys and sells homes. The American consumer senses this more than s/he knows it, and only to a point. And because the most visible, accessible and irritating symbol of the real estate industry is the agent, the agent becomes the problem.
Look at the newsstands or on the Internet or on the best-seller lists and you’ll see that throwing rotten vegetables at real estate agents is a great way to make a buck. It sells books, boosts circulation, and inflates blogger egos.
No, not every agent belongs in the business. Some have yesterday’s skills in today’s demanding environment. Some don't have even that. Some aren't even sure it’s today.
Yes, some agents have the flexible ethics found in a corresponding percentage of the public. "It's okay when I look out for Number One, but it's not okay when the person I'm dealing with does."
Yes, a few agents are the out-and-out crooks that give the industry a bad name.
And, yes, even the better agents make large and inviting targets, with their “lofty” commissions, flaunted success and larger-than-life personae. It's the materialistic side of the American Dream, the side we love for its promise of the big life, and the side we love to hate for its distortion of the good life.
But there’s also plenty wrong with much of the criticism of how America buys and sells homes. Real estate is a story with many sides. The story hasn't and, even more alarmingly, seemingly can't be told accurately and unemotionally, without an axe to grind, a dollar to make or a deadline to meet.
Biased and uninformed reporting is easy to sell and easy to swallow when it confirms the public's worst suspicions. That's why it has a long history. Well over a hundred years ago, newspaper publishers created a sensational and irresponsible reporting that became known as "yellow journalism".
Yellow journalism is today's “media bias”, a phrase I use reluctantly because it’s often turned against unflattering but honest reporting, but the modus operandi is the same: find a group no one likes, blame it for whatever the public thinks is wrong, milk the story shamelessly for all it’s worth, then move on to the next pariah. The contribution of the Information Age has been to remove the few shackles and fig leaves media bias has and drive it into the happy hunting grounds of the blogs. The target changes constantly—an ethnic group, a country, an industry or a profession—whatever happens to find itself in the oncoming headlights of popular attention and its sidekick, the media.
Attacks on the real estate industry can be as cynical and self-serving as the industry at its very worst. More often, they're simply misinformed. Genuine in-depth understanding of any industry comes not from reporters rehashing press releases or from academics grinding out studies like sausage—knowledge is never that easy to acquire—but from living that industry day by day in the trenches.
Academic economists, faced with the "publish or perish" imperative, poke real estate frequently but from a safe distance to see if it does something interesting. The artificial and often bizarre results are couched in scientific jargon and passed to the “better” media, which screen them, not for their statistical methodology ("what's a methodology?") but for their likelihood of boosting circulation and advancing careers.
No, this isn't conspiracy. Like so much untruth, it's just a cozy, synergistic, cynical and nihilistic—nothing is true, everything is permitted—economic partnership.
Reporters get their "hard-hitting consumer pieces" tied up with a bow, eliminating the need to spend old-fashioned shoe leather learning the industry. Academic economists get to make it up as they go along, unchallenged, because a career in the soft sciences means never banging into the hard and inconvenient interfaces of reality. The agent's knowledge, on the other hand, comes exclusively from dealing with those interfaces.
And in the academic's heart of hearts lurks perhaps the hope that he or she is the next Robert Schiller, America's pop economist, simplifier of all that can't be simplified, busting out of the dreary halls of academe and into the sunny world of the New York Times best-seller list.
Once you dare to peel away the academic economist's thin veneer of credibility, you realize that his reality isn't the marketplace but the algorithm's imitation of it, that he's familiar not with the industry he studies—I've never run across one who actually sold real estate—but with advanced math. So it's no surprise that the material he works with is so nebulous and ethereal that he can't prove it exists, even by burning down his own lab.
And it doesn't take much of a cynic to see the academic's alleged proof of his relevance, the peer-reviewed study, as nothing more than open incitement to group-think and scratch-my-back-I'll-scratch-yours-ism, designed and nurtured to maintain old errors and prop up a dogmatic Old Boy network. Veblen, Nietzsche, Baudelaire, Thoreau, Hawthorne, Dickinson, Williams, Pound, Poe—how many original thinkers had to be in their sixties or dead fifty years before they could get a decent "peer review"?
When the media isn't passing along the academic's artificial constructs as if they'd been handed down from Mount Sinai, they're passing along someone's latest agenda-driven press release. And when they're not passing along booby-trapped press releases, they're breathlessly plugging the latest fad. And when they're not plugging and publicizing, they're interviewing panic-stricken buyers during booms and panic-stricken sellers during busts. The latest substitute for insight: "How does it feel?"
Human interest sells. Sensation sells. New sells. Sell sell sell. Just like all those Babbitts in real estate.
Look closely and you'll discover that the vast majority of real estate reporting requires no knowledge of real estate. Almost all of it can be banged out in someone's spare bedroom while still in pajamas. Try selling real estate in pajamas.
Yes, it's a nice tidy charade, wrapped up in the hallowed memories of Woodward and Bernstein and the sanctity of the First Amendment, absorbed uncritically by the man and woman in the street and regurgitated on blogs, in cubicles and around backyard barbeques. It's enough to make me sorry I was only one filled class away from majoring in Journalism. Because real estate is hard work.
I'd like to think that mainstream journalism withers away these days because the public finally recognizes its Wizard-of-Oz fakery, but in fact the coverage goes from bad to worse: much of the public seems to hunger for Wizard-of-Oz fakery—craves it in its raw, uncut state—and crowds the Internet to get it. If the bubble blogs are any indication, we're moving from heck, they're lying to us to cool, we're fooling ourselves.
Who-da thunk-it? The ink-stained wretches of the media were less a menace to truthful reporting than the terribly earnest amateurs on the Internet. I don't know if this qualifies as Yeats' apocalyptic "rough beast, its hour come round at last", or maybe it's Cummings' "little doll" found on top of dead institutions, "pulling and tweaking with his little hands to get back the microscopic knife which sticks firmly in the quiet meat of their hearts".
So welcome to my world and forgive me if it looks a little dire. Whether disillusionment is enlightenment or just the final illusion, it's the common thread running through discussions of real estate these days. The bubblehead's disillusion with real estate is usually second-hand, borrowed from "experts", although this doesn't keep him from making it his identity and running it up the flagpole. The academic economist, who thinks the road to enlightenment only runs through grad school, is plainly disillusioned by the public's "irrational" market behavior and "inexplicable" reliance on the real estate industry, although he might better save his tsk-tsking for the dismal state of his own field. Ditto the average journalist, who fumbles through her career never knowing that she never quite gets the real story.
Here's a thought: what if disillusionment is just a handy rest stop on the interstate to enlightenment? Maybe you should look forward to the day your profession is dissed by nitwits in the press and on the blogs. Maybe you should pine anxiously for the moment your favorite media outlet cynically buries its knife to the hilt in your industry's carcass, just so it can sell a few more issues. Nothing is true, everything is permitted. Rejoice hallelujah brothers and sisters when the experts on your business are called charlatans and the charlatans are called sages. For the truth shall set you free—even when the truth reveals itself accidently and reluctantly.
Blogger or TV talking head, woolly academic or print journalist coasting through her story, their work creates a reservoir of suspicion and resentment toward the real estate industry, some of it deserved, much of it not, that colors the industry/consumer relationship.
The real estate industry, for its part, does little to explain who it is and what it does. The marketing of individual agents is usually amateurish and sometimes scary. Ad agencies tasked with selling the industry and the major brokerages crank out embarrassingly naive, unbelievable fluff.
That's unfortunate, because at its grass-roots level, real estate is simply self-employed, independent contractors much like other small businesspersons—plumbers, dentists, appliance dealers—each competing tooth-and-nail for your business. At the national level, however, real estate looks and acts like monolithic Big Business, something very few consumers can snuggle up to.
And always there’s the elephant in the room: yes, real estate is a legitimate business, but it's as much three-ring circus as hard-nosed business, as much village bazaar as modern services delivery system, a unique, often baffling, occasionally repelling yet oddly compelling mix of sizzle and steak far beyond the comprehension of almost every consumer, no matter how sophisticated, I’ve met. Because the public wants it that way. Because any service industry—any industry this close to the heartbeat of Main Street—is designed from the ground up by, and for, the people who consume its services. Otherwise the industry would never exist in that form.
I’ll give you a ring-side view of real estate. I think you’ll find it useful and thought-provoking, whether you’re a buyer or seller or maybe just someone who likes hitting open houses, whether you're a veteran agent or someone thinking about getting into the business. This is tough love, and you may not always like what you read. You may think I’m too critical of the industry, or consumers, or academia, or the media. You may think I'm not critical enough. But I guarantee you’ll come away with a much better understanding of this vital yet dysfunctional industry that touches and fascinates so many.
.
One caveat: the articles that follow aren't necessarily a “how to” guide to real estate. If that's what you're looking for, go back to my home page and read "Just for buyers", "Just for sellers", "Articles of special interest" and, of course, "About me". These categories cover the nuts and bolts of real estate. What you'll get here is an insider’s overview of real estate. A knowledgeable overview that gives you something even many who know the details of real estate don’t have: the big picture.
You need an objective, realistic overview. You don’t need an apology for the industry. I’m part and parcel of it but, as you’ll learn, I don’t see it through rose-colored glasses. Both you and I—real estate’s bona fide consumer and real estate’s dedicated practitioner—deserve better.
I even make suggestions on how to improve the real estate services delivery system. I think these suggestions benefit both consumers and agents and, most important, may even be workable. Do I think they'll change the status quo? No, because only consumers can do that, and today the status quo benefits consumers more than it does the industry. That's the only reason the status is still quo. We'll talk about that too.
But mostly this is an in-depth, inside look at the emotional, suspicious interface between the real estate agent and the real estate consumer, between the real estate industry and its environment.
Fasten your seatbelts. We’re in for a bumpy ride.