Perfectly Interesting Blueberries Two

So, what do these two Seth Godin blogs mean for real estate? See previous post and read Seth's blog posts (links included) if you got here first, or you're going to be very confused in short order.

Blueberries are tasty, but so small you're not able to easily inspect each individual berry. If you're in the business of selling blueberries, you want no glaring defects (puckering defects may be a better turn of phrase). If you're BUYING blueberries, you want assurance that the blueberries on your cornflakes, in your yogurt  or whatever, taste right--taste like the blueberries you expect them to taste like. One additional factor will become important--there may be different varieties of blueberries, but they aren't marketed as such. Blueberries are blueberries. 

In contrast, apples are much larger, so you can easily examine each one for defects, freshness, etc. If you are familiar with the dizzying array of varieties, you have pretty accurate expectation of flavor, texture, etc., BEFORE you start examining individual apples. It's going to take a pretty special apple to exceed your expectations. If an apple doesn't look that great or is a variety you don't like much, you won't buy it--you'll look for another apple. If you're selling apples you want GREAT apples--most buyers check 'em out pretty closely and won't buy lesser quality, even if they're cheaper. If you're BUYING apples, you know what you like and you're willing to spend effort picking top quality specimens in hopes of sinking your teeth into a really exquisite example. 

Seth contends that books, art and houses (I didn't make that up--check Seth's blog) fall into the same category as apples. Artists who create/design/craft that sort of product can and must go to extremes to achieve the magical in order to blow past expectations to create vividly memorable experiences. That said, everyone who considers acquiring art, reading books and choosing houses has a different taste, in much the same way people prefer different varieties of apples. 

Fungible items (click here for the definition of fungible) like blueberries (or perhaps some services??), are measured by perfection rather than creative force, elegance of design or purely magical effects. With the fungible it's all about avoiding defects or failures, because recovery from failure is expensive, sometimes impossible and there's often liability lurking nearby. Ah perfection--that's part of the OTHER Seth blog titled "Perfection vs Interesting". Seth didn't tie the blogs together, but they are really about the same issue addressing ends of a continuum. Art and the Interesting on one end and the myth of fungible perfection on the other.

BUT WAIT! Houses aren't apples and agents aren't blueberries, you bellow! Let's explore the produce section a little further before you form a final opinion.   

How many apples does the average Buyer purchase in a year? The primary shopper in a family might purchase several hundred. How many houses? Lately, not even one a year--probably just a few in a lifetime. 

Turning to real estate agents and brokerages, how many of them come into your life? Probably similar in number to the houses you buy or sell. Just a few. But how many houses are there? A big bunch AND houses are unique. Sorta appropriate because so are the RIGHT BUYERS looking for that RIGHT HOUSE. THEY BOTH are Apples! On the other hand, agents and brokerages are fungible entities over toward the blueberry end of the continuum. They are interchangeable or are seen that way by much of the public, thanks in part because they choose to be seen that way. Things get even stranger when you consider the two measures of success in real estate. Gross closed commissions (MONEY) and transaction sides closed (DEALS) are perfectly fungible.

To summarize so far, we have a unique product (houses) and unique consumers of services related to that product (Buyers and Sellers), but the real estate industrial complex has populated the providers of professional real estate services with blueberries (agents and brokerages). State and national trade associations don't qualify as fungible, because they have no competition with which to even consider the possibility of substitution. The trade associations attempt to drive the real estate business into the blueberry basket by strongly encouraging every agent to adopt the same procedures, forms, data sources-- everything the same, (even if it's not always optimal for the clients receiving the services).

Predictably, all the fungible components in this system want the consumer to believe that perfection is commonplace, if not universal. Just a smooth path toward that fungible icon of success (money). "One size fits all" works really well with blueberries. Contracts, MLS data fields, advertising (pretty much the same across property types and firms) and all sorts of other stuff follows a definite path. It's a very simple world on the real estate industrial complex side. Sure helps the bottom line for the trade associations too. One array of product and one huge consumer base--of blueberries.

On the Consumer side it's not simple at all and the consequences of the largest financial decision in their lifetimes are huge for Buyers or Sellers. Remember the RIGHT BUYER/RIGHT HOUSE concept? There's some magic there and when it happens--everyone wins, everybody is happy and they generally stay that way. How often does that kind of magic happen? Not as often as it should. Departure from the simple path defined by fungibility takes time. Plunging into the apple barrels requires knowledge about apples and those who would eat them. That leaves less time for the important stuff. Writing contracts, closing escrows and tallying the fungible measures of success. Oh, there are those seminars to attend so everyone does all the stuff the same--and gets to be fungible and perfect (sorta). I think I saw a science fiction movie like that once?

How often do you hear a fellow agent or a broker congratulating someone in the office on a phenomenal effort that produced one of those RIGHT HOUSE/ RIGHT BUYER pairings that seem magical? Probably never--those moments generate the same commission dollars and sides closed as any other transaction. There sure aren't any awards for magic. The toothy grins in the newspaper are reserved for the agents who closed umpteen million in GCC fungibles. In a perfect world of the fungible, agents highly trained in the one size fits all disciplines stride briskly down the path--the same path most other agents take--it's comfortable there--it seems perfect. Apples? Those buying apples, or houses, will figure out what tastes good in time--just pick out one and get in the checkout line! 

How did the real estate business move toward the fungible?

Standardization and technology have crossbred with real estate brokers and trade organizations over the past decade plus to produce a generation of hybrid agents that are far more like blueberries, than apples. There certainly are magical apple agents who offer Buyers and Sellers the very best chance of achieving success in achieving their real estate goals. How can a Buyer or Seller find the magic? Can't Buyers and Sellers tell the difference between blueberries and apples?

Yes the public can tell the difference between apples and blueberries, but not necessarily between apple agents and blueberry agents. Why is that? Buyers and Sellers have considerable experience with apples--they examine and consume 100s every year. They know apples. Apples don't change much. The real estate business changes, and the trade organizations keeps redefining the blueberries by introducing new profitable educational opportunities.

Many brokers and all the trade organizations like blueberries--they're easier to manage and simpler to derive revenue from. Brokers develop brands, but the brands only differ just a little. It's as though they don't trust the Buyers and Sellers to shop for apples! Just grab a basket of blueberries--they're all the about the same, but ours have a cooler label and a better basket. Come do business with our blueberries---they are perfection---at being blueberries.

But what if you need an apple to find the RIGHT HOUSE or the RIGHT BUYER? How do you find the apples? Ask the QUESTION! "How are you going to help me find the RIGHT HOUSE or the RIGHT BUYER?"

If the answer includes reference to the myriad of seminars they've attended on the not so new purchase agreement--you're still in the blueberry section!

Oh, not to worry, when you find an apple you'll discover that if they care about the magic of RIGHT BUYER/RIGHT HOUSE  they'll probably be as familiar with the purchase agreement as anyone.

Perfectly Interesting Blueberries

Seth Godin is prolific and at least a couple times per week posts blogs that  provoke deep thoughts about the current state of the real estate business and how it got that way. There's often a little extrapolation involved and frame shifting and even a flight of pure fantasy on occasion--because Seth doesn't write about real estate--thank God! I'm still hoping that real estate is part of the normal world (hate to think I'd been in an alternate universe for the past 26 years!), so I push and tug till a nexus appears between his blog and a potential topic for this blog.

If you want to discover new ideas about real estate, you've got to go elsewhere--there are few new ideas within real estate. New ideas are generally looked upon with apprehension approaching a superstition state. The successful agents fear that departing from their present path might lead to failure (ie less money) and those who aren't yet successful KNOW THE WAY to find success (ie more money) is to locate the path taken by already successful agents and stay on it religiously without glancing up, down or sideways.

AND here it comes again! WHAT about the consumer, ie the public, the buyer or seller? Where do they fit?
You might think that without Buyers and Sellers, real estate is just sitting there looking pretty, along with agents, waiting in anticipation.

That's not quite right, because even without Buyers and Sellers there's a huge complex of commercial enterprises selling agents seminars, books (not so much anymore), DVDs, tech gadgets, web/social networking solutions, marketing nirvana and, last, but not least, repackaged data (that the agents pretty much already have). It's a huge industry and the trade associations (or labor unions, if you will) control a substantial portion of it. Members are captive consumers who in some cases pay for or subsidize products with portions of their dues. Free sounds very attractive, even if it's not really free and it's not the best available product. Of course the Buyers and Seller would understand why an inferior product was being used for their transaction if they knew the great deal the agent got on it---wouldn't they??

So at least in good times, Buyers and Sellers roam across the real estate landscape. How do they measure success? For the time being let's assume that actually matters in the greater scheme of things (more on that later).

Buyers probably would include stuff like--finding the RIGHT HOUSE at an attractive price and purchasing it with minimal hassle, anxiety or uncertainty-- all in a timely manner. RIGHT HOUSE (if you haven't read earlier posts) is defined as the one house, among all the houses available for purchase, that represents the best overall match to the wants and needs of the Buyer, with a healthy measure emotional resonance thrown in.  .

Sellers want the most possible money with the least cost and hassle, plus a timely close (in other words, they want the RIGHT BUYER to see their house to decide that it is their RIGHT HOUSE).

If that's what the Buyers and Sellers are after, how much of the real estate industrial complex is focused on providing just that experience as often as possible? Here's where it starts getting complicated, so we need to bring in Seth's recent blogs to throw some fruit into the mix.

Here's Seth's Perfect vs. Interesting blog, but first read Blueberries and Apples.

Then we'll be ready to explore further (I have and KNOW this is too long for one post!).

Return from the mist

I know, it's been a while since I posted. The vacation rental hearing at Planning Commission didn't get bumped, as everyone, including County Staff, thought it would and April 14 just sprung out of nowhere. I had accumulated many pages of largely redundant musings since prepping for the February talk at the state association meetings. Not a good thing! Reminded myself of the move "The Wonder Boys" where the novel has developed an excessive life of it's own--to the tune of thousands of pages. I didn't have THAT much, but way too much. I finally got down to it a couple days ago--read my comments on the advisory council draft and discovered (duh!) a lot of redundancy with the comments on the planning commission draft. Also got a timely email from a state association staffer about not overtly accusing the politicians of pandering--that cut out quite a few sentences in several paragraphs!! In one 5 hour session at the computer I edited out 4 pages of a 10 page draft and got close. Did a couple minor changes yesterday and drove copies to County, after some tech frustrations were overcome. I am so done with vacation rentals at this point, but the hearing is next  Thursday. Not much to do in 3 minutes of mic time, so I can resume other intellectual pursuits.

The next real post will focus on the art of real estate, or should I say the lost art of real estate. Blogs appeared in the past couple weeks that gelled some earlier thoughts and I'm ready to write more on the technician mentality that is seizing the industry and compromising the service the public receives.