The Two Primary Jobs of a Broker
Real estate brokers have two primary jobs: Client Acquisition and Conveying Real Property. These two jobs involve entirely different skill sets. In fact I would argue that the type of person who is good at either one of these jobs, that has the skill set to make them good at it, is almost always not the type of person who is good at the other. Many very successful brokers are quite brilliant at client acquisition, but not terribly competent at conveying real property.
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To be successful in the real estate business, it is vital to have, or to generate, a stream of potential clients. In fact, this is so important that brokers will concentrate their time, effort, and money, on this aspect of the business to the detriment of all others. What you find is that the people who are most adept at this, do best in the business financially. And this does not go unnoticed by their colleagues.
As a consequence, transactional competence suffers industry-wide. Why become a better negotiator when you can make more money prospecting? In fact, why learn basic accounting, why keep up with contract and paperwork changes, the law, best practices, building techniques, technology, etc. The whole range of knowledge and experience and expertise that is useful and helpful for serving clients.
The most striking aspect of these two primary jobs is what they are not: Salesperson. Sure, many people believe that a real estate broker is a salesperson: Brokers sell houses. And many brokers continue to advance this misconception. But in today’s real estate marketplace, this is almost entirely untrue.
Real estate is not a sales job. Not really. Rather, it is a customer service job. Whether a broker represents the buyer or the seller, in terms of the transaction, everything from first showing the house right through the closing, it is all customer service. No sales. Brokers do not sell houses; a house either meets the needs and desires of a buyer, or it does not. Even the basic marketing done by most brokers is more customer service than sales. We’ll come back to this.
Now I don’t want this to be about semantics. Some old-school salespeople will argue: Well look, sales is fifty percent customer service anyway. Okay fine. But if we are talking about real estate, it’s more like ninety-nine percent. There’s very little actual house selling in the real estate business. I know: It’s heresy.
Now arguably, the client acquisition aspect of the job is a sales pursuit. But what is the product being sold? Well I can tell you this: It is not houses. No of course not; brokers are selling their service. They are selling the service of selling houses. This is a subtle but important distinction. Brokers pretend to sell houses in order to secure clients. Here, they are not conveying real property, rather they are acquiring clients.
The customer service aspect of the real estate business, the down and dirty, hands-on business of conveying real property requires transactional competence. I think it is fair to say that most brokers just do not have it.
Why? Because it is not important to them.