Think Like a Farmer

I watched the following video by BNN where they interview Aron Cadeau, president, FlatFeeRealty.ca. I found it very interesting and thought provoking. Check it out here

The major point that does not stick with me was the answer to the question: how does Flat Fee Realty makes its money? Or, how does it afford to advertise like the other competing brokerages? The answer: volume.

What's wrong with this picture?

Personally, in the true spirit of Jerry Maguire, I think less clients and more personal attention is important in this business. A Realtor who earns a flat fee may focus their efforts on completing a transaction so they are free to move on to the next customer. As Brian Buffini would put it, they are interested in winning the battle but may lose the war. That is to say, they are interested in closing the deal, but may lose the client in the long run. In a transaction based business, closing deals (and earning a pay cheque) becomes the most important goal.

In relationship based business, or a referral business, the focus is shifted to personal attention and doing the best job possible for your clients. Even if a transaction doesn't complete, a relationship is cultivated. Who doesn't want to recommend a professional who has done an outstanding job for them? The goal is not to get transactions over the short run, but to build relationships and plant seeds for the long run. Think like a farmer.

Cadeau says their average Realtor in his company closes 30 deals per year compared to the average which is around 8. Although it would be nice to close 30 deals in a year, I would rather have fewer high quality experiences with my clients to ensure the continued growth of my business in the long run.

On another note, maybe I'm biased because I'm in the real estate industry, but I find it weird when an organization of professionals advertises themselves as being cheaper than the industry average. Would you go to a Lawyer or a Doctor who advertises themselves as being cheaper than the rest?

CREA VS Competition Bureau

I'm sure you may have heard about a little dispute between the Canadian Real Estate Association and the Competition Bureau and a little website called realtor.ca

I'm still developing my opinions...

Check out what the Competition Bureau has to say here

Here is what CREA has to say:

February 9, 2010
Competition Bureau talking points

• CREA learned today that the Bureau filed a Notice of Application with the Tribunal.

• CREA views the Commissioner’s decision as surprising and disappointing.

• We do not agree with the Bureau’s position that certain CREA rules are anti-competitive, either as a matter of fact or as a matter of law.

• CREA’s rules allow for innovative business models and a broad range of choice for consumers.

• CREA engaged in settlement negotiations with the Competition Bureau in a good faith effort to try to arrive at a consensual resolution. Unfortunately the parties were unable to reach an agreement. This is very disappointing, since CREA has consistently indicated – right from the outset – that it has always been prepared to work with the Competition Bureau to revise its rules and to clarify the way the rules operate.

• CREA Directors have recommended for approval at CREA’s March AGM certain changes to CREA’s Three Pillars and Interpretations, which we believe clarify - through improved language - the Pillars and Interpretations.

• In making these clarifications on a proactive basis, CREA believes that we are fully addressing the Competition Bureau’s concerns, while ensuring the accuracy and quality of MLS® information that Canadians have come to trust and REALTOR® compliance with a code of ethics.

• The Commissioner states that CREA’s rules restrict consumer choice and prevent innovative business models. That is simply false. CREA is disappointed that the Bureau would make this statement in view of the months of discussions about CREA's rules and CREA's consistent position that its rules are not intended to and do not restrict any business models.

• The real estate industry in Canada is highly competitive. CREA currently has more than 98,000 members operating independently across the country who are competing for business and offering a wide array of services and pricing structures. All any consumer has to do is ask around to quickly confirm the range of price options and services offered by REALTORS®.

• CREA does not tell REALTORS® how to run their businesses or what fees or commissions to charge. Members of the public choose with whom they want to work and negotiate the terms (services and fees) of the relationship with their REALTOR®.

• CREA’s interest and that of its members is to ensure consumers have choice, that they are protected during one of the most significant transactions they will undertake, and that the integrity of the MLS® system is preserved for the benefit of REALTORS® and the Canadian public.

Soul Food

January 27th: "Over time, repeating encouraging words will help change your way of thinking about yourself, and your body will pay you in kind by hooking onto the silver lining you are projecting into the universe. Not only that, but your mind will also start to believe all the loving, kind, and gentle words you are feeding it. So embrace yourself, keep you chin up high, and remind yourself who's in charge here - you are gonna make it after all." - Esther Blum (author of Eat, Drink, and Be Gorgeous)