Back to Basics and Core Values in a Changing Market
By Harley Rouda Jr.
September 2007
The past several years have seen an unprecedented boom in the housing market in a large portion of the country. However, over the last 18 months we have seen a dramatic leveling out and, in some cases, recession in housing markets. Things have changed and the smart business person cannot pretend otherwise.
How one adapts to this change will determine whether one will fail, survive, or thrive in the years ahead. During the boom, we saw tremendous growth, but we also saw a departure from the core values that make real estate industry professionals trusted advisors to home buyers and sellers. All segments of the industry saw people taking shortcuts for profits instead of putting their customers first.
Whether it was title agents, mortgage originators, appraisers, real estate agents and brokers, or countless other professionals involved in the home-buying process, the focus for a significant number was profit and not professionalism. As an industry dependent on the satisfaction of our customers, we need to re-emphasize that professionalism and profits go hand in hand. For this reason, I submit these seven points to ensure that we get back on course and put our customers first.
1. Start with the person in the mirror
Take a long look at yourself and ask yourself if you are putting your customers first. Step out of the gray area and be honest with yourself about your own practices.
2. Know your fiduciary responsibilities and make sure your agents and employees do as well.
These responsibilities are what create a solemn bond between you and your customers. A strong grounding in them is the cornerstone of professionalism.
3. Stop looking the other way.
Enforcement is on the rise. Whether it is people in your own firm or others, stop looking the other way when others engage in unethical or potentially illegal practices. It does not help you nor your firm, and it does not help the reputation of the industry. Look for red flags and report them. Catching aberrant behavior or practices early avoids larger problems later. Don't let your fellow professionals take you, your colleagues or your industry down a disreputable path.
4. Be transparent.
Don't try to hide things from your customers. Customers who think they have been misled do not make referrals or recommendations. In a business that thrives on referrals, a lack of transparency and its consequences can be fatal to long-term success.
5. Embrace and even push for industry changeâ??even if it hurts in the short run.
Businesses that resist change often quickly find that the time and the market have passed them by. Think about eight-track tape players or VCRs. Eighteen months ago, Motorola was the toast of the town with its RAZR phones and making billions. Now, its cell phone division is losing hundreds of millions a year and large swaths of market share. Things can and do change quickly.
6. Welcome enforcement of the law and regulations.
Most laws that govern our industry are designed to ensure fair play and protect consumers from bad actors. We should welcome enforcement of those laws and regulations because it protects us from those who would cheat to get ahead at the expense of our customers and protects the reputation of the industry in the long run as well.
7. Take the long view.
Quick profits and shortcuts are no substitute for having a solid, long-term plan that involves giving consumers the value they expect and appreciate. People who succeed in this industry are people who build their business and their reputation for the long run.
They are the people and firms who get referrals from the children of clients they first met thirty years ago. If we adhere to these seven points, our industry will survive downturns and continue to thrive well into the future. If we try to find shortcuts or easy fixes, we may find ourselves on the path to irrelevance. As Edmund Burke said long ago, "All that is necessary for the triumph of evil is that good men do nothing." Now is not the time to do nothing.
Harley Rouda is the CEO and managing partner of Real Living. For more information, please visit www.realliving.com.
