Do you remember the movie, ‘There’s Something About Mary?’  I’m sure you do. The Farrelly brothers “romantic” comedy certainly raised some eyebrows when it hit the big screen. One scene in particular, though, continues to stand out in my mind.

Ben Stiller’s character, Ted, picks up a hitchhiker to fight off boredom on his drive to Florida to visit Mary.  Upon picking him up, the hitchhiker (played by Harland Williams) goes into detail about a great new video series that he has conceived.

Now, I laugh so hard I actually cry whenever I see this scene… Harland Williams plays “crazy” really, really well!

And the sheer lunacy of the dialogue between Ted and the hitchhiker about six-minute, seven-minute and eight-minute abs highlights what has been going on in real estate for a while.

It’s a Race Baby!  A Race…to the Bottom

When brokerages compete solely on the price of their services, the only logical conclusion is that, over the long haul, it’s one big “race to the bottom” of the service barrel.

Quality representations? Out the window.

Attention to detail? Nope.

The dogged, relentless work ethic often necessary to truly provide quality client service? Can’t realistically happen at those price points.

The bottom line:  You get that for which you pay.

If the services you provide are the same as the services being provided by all the other brokerages in town, you have little choice other than to compete on price.

Good luck with that model.  Even if you “win,” you lose.  And when you lose, you really lose.

But what if your real estate brokerage did business…

…uniquely…

…differently…

….successfully…

…and added value to their services, instead of simply charging less?

For too long, real estate brokerages have over-promised and under-delivered.  The only way to continue to draw new agents into the fold with this model has been to drop the cost of working with a brokerage.

“…it’s clearly brie time, baby!”

Step Up!

It’s that simple.  Step up to what you deserve.

For a long time now, real estate agents have been charged a lot for very little in return from their broker.  Wouldn’t it be great if the broker’s brand actually stood for something?  And that brand could open doors for you?  Or even add MORE credibility to your all ready stellar reputation?

By way of example, I have been the beneficiary of a bunch of referrals from people who have never utilized my services.  Rather, they had such terrible service experiences in prior real estate transactions that they refer their friends and family to Professional One to avoid them having similar experiences.

The sole reason for their constant referrals without explicit knowledge of my services is the results they see from our past clients and the continuing conversation we are having about kicking the bar of real estate professionalism up the ladder!

In other words, they see the quiet outcomes of an intentional marketing plan, an intentional purchaser’s plan and an unwavering focus on increasing professionalism in the industry, beginning with ourselves as the examples.

No platitudes.  No puffery.  Just results.

Tired of what passes for “professionalism” in real estate these days, we at Professional One created a “barrier to entry” consisting of eight guidelines every agent must meet to become a Professional One real estate professional.

Here are two responses to our elevated barrier to entry (the first from a member of the public, and the second from the broker of another real estate company):

The #140 Conference is coming to Detroit!

The date? October 20, 2010.

The location? The Fillmore

The lineup? Check it out here.

It is a truly star-studded cast featuring #140 Conference creator Jeff Pulver (@JeffPulver), Social Media Megastar Chris Brogran (@ChrisBrogan), General Motors’ Head of Social Media Chris Barger (@CBarger), and local Social Media stars Charlie Wollberg (@CharlieCurve), David Murray (@DaveMurr), Henry Banalon (@balanon), Hubert Sawyers III (@hubertgam), Eric Brown (@Eric_Urbane) and many others.

Don’t miss this chance to be a part of a truly historic day in the digital renaissance of Detroit!

I am woefully, hopelessly and – sigh – permanently addicted to the book authored by Simon Sinek called “Start With Why.”

Today, I want to focus on ONE WORD that keeps sticking in my thoughts as I continue to process all the great information Simon Sinek lays down in this epiphany creation machine of his.

Deep-Seated Emotional Response

And that word is “Visceral.”

His point: UNLESS you make a visceral connection with your customers/clients, you will NEVER instill any level of long-term loyalty in them.

Here is a quote from the book (see on page 125) that makes the point:

But we know that people often go out of their way, pay a premium or suffer an inconvenience to buy a product that resonates on a visceral level with them.

And “features & benefits” DO NOT evoke that visceral response which is so fundamental to creating the long-term loyalty that creates companies, brands and people that have lasting success.

Non-Visceral, “Features & Benefits-Based” Messages

Examples of “features and benefits” ideas that create no visceral response in people:

• We’re cheaper
• We have more (insert bell and or whistle here)
• We’re the biggest
• We’re the best
• We’re number one
• We are extremely successful
• We have the most people/agents/offices/sales
• We have the best idea/plan/concept

Visceral, Inspirational Messages

Examples of messages that inspire and create visceral response in people:

• “I have a dream” (Martin Luther King)
• “We challenge the status quo and empower the individual” (Apple)
• “We make decisions at the top that have the best interests of the group at heart” (Continental Airlines)
• “I am a renegade” (Harley-Davidson)
• “The Ultimate Driving Machine” (BMW)

Allow me to give you one example in real estate of an individual successfully building a brand and a reputation based on making consistently visceral connections with everyone he meets: Jay Thompson (@phxREguy) of Thompson’s Realty in Phoenix, AZ. I cannot explain exactly HOW he does this, but I can tell you THAT he does it. Start reading his blog and you’ll quickly understand what I am talking about.

I’ve included some additional commentary specific to real estate in the video below. The bottom line: if you want to build a lasting business – whether as a brand, an office, a broker, a team or an agent – you absolutely MUST start connecting with people on a visceral level…

Link to Video featuring Simon Sinek: Click HERE

I’ve found that there are a handful of books, videos and websites that I am constantly quoting, referencing, re-reading or thinking about.

These are the concepts, ideas and people that have shaped and molded me the most.

I thought I’d put them together in one place just for the sake of convenience.

I hope you get something from one or more of these resources. I think they are all incredible. I hope you agree.

In no particular order, here are these resources (note that not all of these things are real-estate-specific, but I nonetheless have included them because they are applicable to ANY industry because they are so powerful):

General

• “Socialnomics” by Eric Qualman (@Equalman) | This is the best resource for understanding the power and potential of Social Media, which is one of my primary passions. Qualman lays out the facts, the stats and the exploding trends that made getting involved in Social Media a no-brainer for me.
• “Crush It” by Gary Vaynerchuk (@GaryVee) | Vaynerchuk is the poster-boy of leveraging Social Media into a cottage industry of its own. He is a dynamic, high-voltage speaker who spawned the “Crush” movement of which I am a mega-disciple.
• “The 4-Hour Work-week” by Timothy Ferriss (@tferriss) | I’ve consulted this book so many times I’ve nearly destroyed it (see image below). I have no idea how Ferriss came up with so many great ideas in one book, but, thank God for all of us, he did. Read this book. Read it 20 times. There’s that much in this thing.
• “Trust Agents” by Chris Brogan (@ChrisBrogan) | Brogan is a giant in Social Media, and this book is one of the primary reasons why. He talks about how relationships are built and based on trust, and how anyone can leverage this idea to create lasting success. We thought so much of it we created an entirely new community outreach program based on a blog post he wrote. And it’s creating great results for us already.
• “Start With Why” by Simon Sinek | This book (video summary below) changed literally EVERYTHING we do at our company. I threw SIX YEARS worth of marketing  strategy out the window and started over because he made us realize we were NOT “starting with why” (actually, we were, but you’d never know it from our marketing, which was entirely “features and benefits” driven, ergo, we had “commoditized” ourselves into looking exactly like our competition, which we are not).

Real Estate-Specific

• Inman News | Inman is the number one portal for real estate news and information. I visit this site at least once a day and I find that I get more quality, practical content from this source than probably any other.
• MyTechOpinion.com by Reggie Niclolay (@ReggieRPR), Nicole Nicolay (@Nik_Nik)  & Chad Johnson (@ChadAJohnson) | This is a treasure trove of great resources for real estate professionals, with particular emphasis on technology and the whats, whys and hows of integrating Social Media into real estate. A super dynamic blog from super dynamic people. Also check out the next iteration of their work at AgentEvolution.com.
• 1000WattConsulting.com by Marc Davison (@1000WattMarc), Brian Boero (@1000WattBrian) & Joel Burslem (@JBurslem) | From a branding/strategic perspective, 1000Watt Consulting is the ultimate brain trust in the real estate game. They are the the seers, the visionaries, the “we know what’s next” guys that tower over all the others. I read everything they write…because they’re always right. As their slogan says, “Turn On.” Indeed!
• TechSavvyAgent.com by Chris Smith (@TechSavvyAgent) | I had the pleasure of meeting Smith at Agent Reboot Seattle, and was blown away by the depth and breadth of his knowledge. Check out the site and start elevating your tech-knowledge-y.
• 365 Things To Do In Vancouver, WA and Clark County Real Estate Guide by Dale Chumbley (@DaleChumbley) | Chumbley has taken the “Chris Brogan Plan” and proven its legitimacy by virtue of this great site that is creating mega-buzz not only in his local real estate market but nationally within the real estate industry itself.
• Real Estate Trends Report by Stefan Swanepoel (@Swanepoel) | Swanepoel is real estate’s ultimate observer, commentator and educator. His annual Trends Report is the most widely anticipated, read and quoted publication of its kind in the industry. When Swanepoel talks, I listen…always!
• Social Media Report by Stefan Swanepoel | Swanepoel published this book early in 2010, and it is the gold standard in terms of an authoritative, comprehensive road map for Social Media and real estate.

Video

• “What Motivates Us” by Daniel Pink

• “Start With Why” by Simon Sinek

• “Social Media Revolution” by Erik Qualman

• “Social Media Socialnomics” by Erik Qualman

Last night, Eminem and Jay-Z played an historic rap show at Comerica Park in downtown Detroit.

Yo. Word. One-two, one-two.

Em and Jay inspired me, so I sat down, searched for some beats, put pen to paper (actually, Pogo to Penultimate on my iPad) and came up with a “song” (note the quotation marks…ha ha).

I call this joint “Agent Reboot Rap,” as an homage to Inman News as a small measure of gratitude for being included on their awesome Agent Reboot Tour.

Get Yourself Some Funducation

Before you press play, allow me to make the following remarks:

• I KNOW that I have no skills/skillz. I’m not in ANY WAY suggesting that I do. I just wanted to have some fun and shine a light on the Agent Reboot Tour.
• The Agent Reboot Tour is a great combination of FUN (with leaders like Nicole Nicolay and Daniel Rothamel, that is assured!) and EDUCATION (“funducation?”). This video is intended to mirror the spirit of the Tour.
• Continuing the prior point, if you want a sense of what the Agent Reboot Tour experience is all about, check out their Facebook page and scroll through the photo albums. The Agent Reboot Tour is a high-energy experience. Yes, you will see people actually dancing in some of those photos. They are experiencing what I call the @Nik_Nik effect (that’s her, practicing her “Metallica moves,” below…).
  
  
• Special thanks to all of the people who appear in the video (in no particular order), including Nicole, Daniel, Sherry Chris, Wendy Forsythe, Dale Chumbley, Chad Johnson, Marc Davison, Darin Persinger, Chris Smith, Marilyn Mock, Teri Conrad, Kelley Skar, Linda Aaron, Debra Trappen, Tom Everitt, Katherine Cannon, Todd Waller, Derek Overbey and the awesome technology products Gist and Roost.
• I truly hope that you take a day out of your life to participate in the Agent Reboot Tour if it comes anywhere near your town (there are still MANY stops left on the tour!). I was truly surprised at how much I learned from the great speakers and talent that Inman News has assembled for the event.
• Let me say it ONE MORE TIME: I KNOW that I have no skills/skillz. I’m not in ANY WAY suggesting that I do. Capiche?

Word to Your Reboot…

With those things being said, NOW it’s OK to press play!

Thanks for all of the positive feedback, my friends!

I’ve been bothered by something for a very long time.

Basically, since that day I entered the real estate industry back in 1991.

I’m going to call this problem the “ethics of open houses.”

What She Said!

I wrote an entire blog post on this topic last night. And while surfing the Internet this morning looking for a couple of additional points to include, I stumbled across this, written by Rebecca Diamond of Keller Williams Mainline Realty (sic) (emphasis added):

There have been a flurry of recent articles about Open Houses. Some say they work, some say they don’t. Here’s what irks me: we have to define what we mean when we say “they work”. My first year in real estate, in 2004, I sat at an Open House approximately 40 out of the 52 weekends. Not once did I sell the house I was sitting. Since then, I’ve garnered alot more experience and polish, but I still haven’t sold an open house that I was sitting. Don’t get me wrong, I have no problem with open houses, per se, if you can be honest about their traditional, intended purpose: to get Buyer leads for the AGENT.

HERE’S MY PROBLEM: we as Realtors are perpetuating the myth, to our Sellers, that an Open House is an effective means of exposing their home to the market. It ain’t. According to NAR, Sunday is the slowest day of the month for home sales and Open Houses are one of the least effective methods. Why are we combining these two abysmal statistics and saying that “it works” for Sellers? Why can we not have a very frank discussion with Sellers and teach them that time and money are better spent on ALMOST ANY OTHER form of marketing? I just don’t get it. Unfortunately, there are still enough Sellers out there that want Open Houses that I end up doing them just to make ‘em happy but I am very honest with them about the hidden, or the REAL, purpose of Open Houses. Are we so hard up for Buyers that we have to USE our Sellers in order to get leads? If you wanna get leads from an Open House, that’s fine. But tell your Seller that that is what you’re doing, that is why you’re doing it. Don’t lead them to believe it might sell their house when in all probability, it wont. Let’s be honest with our clients, shall we?

I like Rebecca’s version of my blog post better than my own, so I deleted mine and started over with hers as the foundation.

To amplify, I’ve encountered this idea – “use open houses to pick up more clients” – over and over in training sessions conducted by many of real estate’s biggest coaches and educators. It’s old school, a given, no deal deal, right?  It’s ubiquitous, really. If you don’t believe me, Google “pick up buyers at open houses” and note the 446,000 responses!

How Would Our Clients Respond?

But humor me and answer this question: How do you think your client – the seller, the person whose home you are using to “capture more clients” – would react if you said:

“Hey, I’m going to do an open house on Sunday. Now, I’m going to lead you to believe that the primary purpose of the open house is to find a buyer for your home, but the hard reality is that the odds of that happening are very, very low. Maybe 1%, if I get lucky. The REAL reason I’m doing the open house is to attract potential buying clients. Once I realize that a given looker isn’t interested in your home, I’ll go into my song and dance and try to convince them that I should help them buy their next home. Is that cool?”

I have nothing to back this up other than 20 years of personally selling real estate at a relatively successful level, but here’s what I think the typical seller would say in response to this:

“As I am your client, you have a fiduciary duty to me, meaning that EVERYTHING you do as my agent should be in my best interests. As such, YOUR personal interests should always be secondary to mine. So, NO, you certainly may NOT use my home to conduct an open house if your primary objective for doing so is just to pick up more clients for yourself.”

THIS POST IS NOT ABOUT OPEN HOUSES!!!

Before I get to my ultimate point, allow me to add the following:

• THIS POST IS NOT ABOUT OPEN HOUSES. It is about REALTOR ETHICS and the myriad of agents who knowingly mislead their clients about the effectiveness of open houses simply because it potentially benefits those agents to do so (see my prior post re “Absolute Candor” and our responsibility to do what we know is right, irrespective of what our clients think).
• Similar to Rebeccas’ point, I’ve read a number of studies about open houses, and I’ve yet to find one that suggests the success rate ever exceeds 1% in terms of what SHOULD BE the primary objective, finding a buyer to buy the open in which the open house is being held (and, at that kind of paltry success rate, I cannot justify doing an open house at all when there are so many other things I could do as a listing agent that would likely produce a greater ROI in terms of my time invested). Also, my personal experiences with open houses is identical to Rebecca’s: I’ve done many, and I’ve never sold the “opened” home. Not once.
• I am NOT saying these things to begin a debate regarding the success rate of open houses. I am saying these things because I do believe it is generally accepted within the real estate industry that open houses are not very effective at selling the subject property, but are quite effective at picking up clients, and that most agents know these things.
• I know plenty of good agents who are staunch advocates of open houses because they truly believe they work. Since I know she’s going to vehemently disagree with this entire post, I’m going to go ahead and name one of these agents: Andrea Geller (@ AndreaRealtor). I have nothing but respect and admiration for Andrea. She and I just have radically opposed views on this topic. And her market – urban Chicago – is VERY different from mine – suburban Detroit. And I think that COULD make a difference.  But my point remains: for every Andrea, there are a thousand on the other side of this fence, just like me, who truly believe – based on years of real-life experience – that open houses do not work. THESE are the agents to whom this post is directed.

This post was not written to slam open houses or the agents who do them.  If you are an agent with pure motives and honest intentions and you truly believe that open houses work, that’s great. Keep doing them, and more power to you!

But what about the rest of us?

So I attended Inman Connect San Francisco.

And I had the time of my life.

However, in the back of my mind, I thought, “That was an anomaly, a statistical aberration, beginner’s luck, a perfect aligning of the planets, whatever you want to call it…it won’t happen again.”

Boy, was I wrong.

Seattle was everything San Francisco was. On some levels, it was even better.

Here’s a quick recap of my whirlwind visit:

• Bellevue is an amazing place. If I could design a city, it would look exactly like this. Clean, new, upscale, towers of pricey condos everywhere, walkable, and full of people who look…happy? Is that the word I’m looking for? Yep. The climate? To die for. And the natural beauty of the area is absolutely breathtaking – the picture at right taken through the plane window of course does not do it justice. I want to come back here. Again. And again.
• Before I go any further, I want to say THANK YOU to Inman News for inviting me to speak. It is an honor and a privilege to be part of this great event, and I was and am humbled to be included. And I want to give a special shout-out to Madelyn Mock, who works tirelessly behind the scenes to make sure an event like Agent Reboot can happen and go off without a hitch. Which it did. You rock, Madelyn!
• Whoever chose the Meydenbaur Center (below) as the venue deserves a raise and a gold watch. The Exhibit Hall in which Agent Reboot took place is the nicest room of its kind I’ve ever been in. The venue alone gave the day’s proceedings an air of “world-class-ness” and “cutting-edge-ness” that was really special.
  
  
• The fearless leader of Agent Reboot’s west coast swing is the inimitable Nicole Nicolay (@nik_nik). What can you say about Nicole that hasn’t already been said countless times before? There is simply no one else like her in the real estate space (and probably no one else like her in ANY space). She is the perfect, perfect, PERFECT choice to emcee an event of this kind, because she is a special combination of cool, smart, hip, serious AND fun at the same time, energetic, relentless, positive, respected, knowledgable…I could go on and on. She can go from convincing the entire room to dance to having a dead serious conversation about potential imputed broker liability in short sales without any loss of credibility. There’s just one Nicole. It’s her world, and we’re just living in it. And we’re damned happy to be here.
• Speaking of Nicole, below is a photo of her (taken at the after-event Tweetup) with Teri Conrad (@TLCHome), me and Tom Everitt (@ThinkTomDotCom), a super-sharp agent from Vancouver, BC who taught me a lot about video (short version: he has a video studio set up in his garage that has been featured on local TV news shows) and impressed me with his knowledge on a range of topics.
  
  
• I met Dale Chumbley (@DaleChumbley) originally in San Francisco. In Seattle, I got to spend some true quality time with him. Dale is getting a lot of notice of late, and all I can say is (1) he totally deserves it, and (2) it could not happen to a nicer guy. I had dinner with Dale and a number of other people and then drinks at a sweet outdoor patio bar called the Tap Room, and throughout the entire evening all I saw was this guy that everyone just seems to adore. He is full of grace and knowledge and loves to selfishly share of himself with other people. Example: he mentioned that he makes entire videos with his iPhone. I asked for a quick example, thinking he might spend one or two minutes giving me a big-picture overview. Nope. He made a freaking movie. And then he edited it, showing me all the options along the way. He spent a good 20 minutes giving me a crash course. I was humbled that he would do that for me. Dale Chumbley: Righteous Dude. Also: you can’t spell “Chumbley” without also spelling “humble.” Somehow, that makes perfect sense.
• I co-presented at one point with Teri Conrad. As we prepared for our presentation leading up to the the event, I got to know Teri and I have nothing but respect for her. She’s like the sister I never had. It was an honor to work with a professional of her caliber.
• I also met Chris Smith (@techsavvyagent) of TechSavvyAgent.com. I know a bit about technology, so it takes a lot to impress me on that level. This guy overwhelmed the room with his relentless assault of quality tech advice that included no fluff whatsoever. It was just one good tip after another. And he was a very effective speaker and presenter.
• I also met Darin Persinger (@DarinPersinger; that’s him at right) of ProductivityJunkies.com who shared a lot of great content regarding webpage capture and conversion. Darin is a well respected voice in web and Social Media and it was great to finally meet him. And he really blew me away by inviting me to breakfast the morning I left, picking me up, taking me to a great little restaurant and bringing me back to my hotel. That is the spirit of Social Media, personified.
• I shared the stage at one point with T.A. McCann (@tamccann) of Gist. I must admit that I have never taken the time to truly investigate and understand Gist, although my partner Todd Waller (@ToddWaller) has and tells me it’s a genius concept. Having said that, I now feel I have the gist of Gist (too predictable? Sorry!) and I think it is a great idea worthy of further investigation.
• I finally got to spend some time with Chad Johnson (@ChadAJohnson) of MyTechOpinion.com and AgentEvolution.com. Chad travels with Nicole and is a major reason why the “Nicole Nicolay” brand is what is is today (mega!). Not to mention that he is a super-smart and sharp guy in his own right. I had a great conversation with Chad at the Tweetup after the event and all I can say is that he IS the man (and an amazing photographer).
• 
  
  I met a number of other amazing people – Linda Aaron (@skynnard; that’s her in the photo with Dale Chumbley at right), Debra Trappen (@debra11), Geoff Thomas (@GeoffThomas77), Katherine Cannon (@KatherineCannon), Kelley Skar (@KelleySkar) and so many others. Again, the power of these “connection” events is exactly that: connecting with people you’d never have the chance to meet in any other way.
• I heard a really cool SMROI story from a guy named Dan Keller (@dankellermtg).  I encouraged Dan to write a blog post telling the full story, which he then did. Here’s the link to that post.
• Of course, there was a LOT of other quality content at the event, but in the interest of keeping this post (potentially) readable, I have to limit my observations.
• Finally, you know you have influence when people talk about you and you aren’t even at an event. Over and over I had conversations with people, and somehow the words “1000Watt” and “Marc Davison” (@1000wattmarc) ended up being spoken by someone. Somehow, I was never surprised…

In summary, Agent Reboot Seattle was another great event and another great experience for me personally.

I cannot wait to do it again in Las Vegas on September 15!

PS: In case you missed Agent Reboot Seattle, the topics about which I spoke were as follows:

• Think Before You Tweet (click here for downloadable PDF)
  
• The ROI of Social Media (click here for downloadable PDF)

Some Background…

Part of my work history includes managing multiple campaigns for state representative here in southeastern Michigan.  As such, I’ve never really been able to shake the draw of the political arena.  In fact, 2010 may be the first time in my voting history that I did not tune in to a gubernatorial primary race until a week before the election…

All of that to add context and background to my following statement:

It IS an election year!

And this post from James Pethokoukis highlights a potential upcoming move that, in my book, reeks of political pandering for votes.

Don’t believe me?  Check out what could happen August 17th:

Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth.

The move, if it happens, would be a stunning political and economic bombshell less than 100 days before a midterm election in which Democrats are currently expected to suffer massive, if not historic losses.

[emphasis mine]

Am I blind to the fact that many folks (1 in 5 homeowners, according to the article) are upside down on their mortgages?  Ummm…no.  I counsel selling clients on this exact issue on nearly a daily basis.

Am I oblivious to the positive impact this could have on 20% of the households across the country?  Nope. See above.  In fact, I know quite a few folks whose stress levels would drop immediately and would no longer need blood pressure medication.

“Todd, aren’t you inflating the significance of this “Main Street bailout” just a little bit?”

First, where is the money going to come from to pay off the principle owed on nearly $800 billion dollars worth of upside down properties?  It will come from the taxpayers’ pockets, THAT’S where.  Our magical printing press is nearly out of ink, after all.  Oh, wait…

Second, to whom will the money actually go?  When the Main Street bailout happens, it will appear to benefit the voter a lot, but ultimately will line someone else’s pockets.  In fact, it appears as though it will line the very pockets of those that helped create this housing debacle… the creators and investors of those new-fangled mortgage instruments that are backed by troubled mortgages.

Admittedly, it is very hard to not be heartened by sheer sympathy, given that this could affect so much positive change in peoples’ lives.  The fact remains that we simply do not, as a country, have anything to back the projected $800 billion that would be required for this “bailout.”   And let’s not forget the logistical mess this will create.  For starters, do you think the banks are ready for nearly 9,000,000 – nine million! - refinancings all at once?  How about put-back costs?  What about the costs of those nearly nine million refinancings?

As for whose pockets this money ultimately ends up in, well, let’s go down that rabbit hole, shall we?

Today’s Real Estate Example

Understand that this example only applies to mortgages sold by Fannie and Freddie on the secondary market.  Collectively, they own or guarantee 40% of the mortgages in the United States.

When one of these mortgage notes was created, it was then sold by Fannie/Freddie on the secondary market as a Mortgage Backed Security (MBS).  Suffice it to say, the investors of the MBS’s expect a return on their money.  If Fannie/Freddie suddenly forgive a bunch of the principal owed on these mortgages, and the MBS holders are expecting a certain rate of return, then the money Fannie and Freddie receive as part of their “wipe the slate clean” approach will go directly into the investors’ pockets.

But what galls me the most is not the lining of the investors pockets, though that is a bitter pill to swallow.  No.  To me, the most galling thing here is the thought that goes into such an insidious move.

Stupid Is As Stupid Does

Yep, I’ll say it.  Votes are the conductor of this train of stupid thought.  Here is Paul Jackson’s take of the reason behind the move:

The argument here is as simple as it is seductive: the Democrats, facing an ostensibly challenging upcoming election cycle, decide to go after some 15 million or so votes by using Fannie Mae and Freddie Mac…

The idea sounds so far fetched, that there’s no way that it could come to pass!  Right?  I mean, no one is so myopic as to even consider attempting this kind of move.  Are they?

Paul Jackson from HousingWire.com, again:

Dig deeper and it becomes pretty clear that the entire idea of the government stepping in and wiping out mortgage principal for some borrowers is utter and complete nonsense. But don’t let the sheer stupidity of it all fool you into thinking it can’t happen. It’s simple, it’s seductive, and it’s stupid. Sounds just like the sort of plan only a politician could love, doesn’t it?

[emphasis mine]

Did I mention I used to run political campaigns in the state of Michigan?  That experience taught me that if it garners more votes in this election cycle, regardless of the long term consequences, then we’re going to make it happen. Unfortunately, I cannot agree more with that last line of Jackson’s.

“Sounds just like the sort of plan only a politician could love, doesn’t it?”

One final word from James Pethokoukis on the political calculation behind this move:

The political calculation is that the number of grateful Americans would be greater than those offended that they — and their children and their grandchildren — would be paying for someone else’s mortgage woes.

I’ve written a few blog posts that reference this amazing book “Start With Why.”

…this book has affected my thinking on a variety of levels.

…and it tied up a number of loose ends and put a nice red bow on top of this box of stuff I’ll call “reasons why the real estate industry is what it is.”

The biggest point the author, Simon Sinek, makes is this:

People don’t buy what you do, they buy why you do it.

In the real estate industry – unlike most industries – brands don’t seem to matter much…to agents, to brokers and to the public.

The primary reason for this, in my humble opinion?

None of the big brands have a “why.”

Please allow me to better explain what I mean by this.

Inspiration vs Manipulation

According to Sinek:

• There are only two ways to influence human behavior: you can manipulate it or you can inspire it.

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  When companies or organizations do not have a clear sense of why their customers are their customers, they tend to rely on a disproportionate number of manipulations to get what they need.

• …if there is hope for a loyal, lasting relationship, manipulations do not help.

A “why” is something that influences via INSPIRATION.

Everything else falls under the heading of “manipulation.” Examples (along with illustrations that are common in the real estate industry):

• Price: “Our commission splits are better than Brand X’s splits.”
• Promotions: “Join before the end of the year and I’ll let you keep 100% of your next three sales.”
• Fear: “If you don’t work with Big Brand X, you can’t be sure of what you’ll get.”
• Aspirations: “Join Big Brand X and we’ll show you how to be just like Mega Agent Joe Smith!”
• Peer Pressure: “All the best agents work at Big Brand X…you should, too!”
• Novelty: “Join Big Brand X and we’ll give you an iPad!”

Manipulations Can Work in the Short Term…But They Don’t Breed Loyalty

But he IS saying that they don’t breed loyalty, and that they don’t lead to the establishment of brands that have meaning and resonate with people.

That helps me understand why so many Realtors jump from company to company to company, and why consumers don’t have a clue what differentiates Big Brand A from Big Brand B.

None of the big brands have a “Why.”

I worked at two of the Big 5 brands before I started Professional One, and I have no idea what the “Why’s” of those brands were or are.

No Inspiration = No Loyalty

Maybe that’s why I felt no loyalty to them. It was just about numbers and sales and offices and and a mind-numbing exercise in “having the most agents” and “having the best splits” and “selling the most houses.”

There was not one iota of inspiration in any of it. There was no larger purpose. There was no call to action. There was nothing that made me want to stand up and say, “I am PROUD to work at Brand X.”

I could see that my clients didn’t give a whit about any of it. And neither did I.

The Commoditization of an Entire Industry

Brands that attempt to differentiate on this manipulative, non-inspirational level turn themselves into “commodities,” as Sinek says it, and set themselves up for a never-ending race against their competitors who are also attempting to differentiate on these same measures.

What happens when your whole message is “We’re number 1!” and someone else beats you at your own game using the analytic that you chose?

It’s a never-ending chase, and the worst part is that none of it mattered in the first place, because there is no inspiration in any of it!

At the risk of complicating this post, allow me to add a few additional parting thoughts:

• I’ve read a number of other books recently (“Differentiate or Die,” “You Can’t Teach a Kid to Ride a Bike at a Seminar,” and “The Sandler Rules”), and they all completely support what Sinek is saying here: that people do not buy based on “features and benefits” (the “what” or the “how”), they buy on something much deeper: the Why.
• Sinek goes on to talk about authenticity, and how EVERYTHING within an organization has to line up and be consistent with the organization’s clearly articulated “Why” message, or the “Why” – no matter how inspirational – won’t matter. When the organizational behavior doesn’t support the “Why,” people will immediately see that the “Why” is inauthentic. That’s why you cannot slap a brand-spanking-new “Why” on a top of an existing organization and have it make any meaningful difference. Over the long haul, it just won’t work, because the actions of the people won’t support the “Why.”

I’ll finish with the only thing that really mattered in this post: people don’t buy what you do, they buy WHY you do it…

PS – If you want to better understand why “Why” matters so much, watch this video from the author of “Start with Why:”

Recently, I received an email from a nationally known real estate educator.

They were preparing to teach at a multi-day conference at one of the big 5 brands on the topic of Social Media, and they asked me if I’d mind contributing something to their presentation.

Given my passion for the topic and my respect for the person asking, I dropped what I was doing and wrote a lengthy email response.

And one part of my response dealt specifically with the brand exposure that the Professional One brand has received as a direct result of our Social Media efforts.

Given their reaction to what I wrote, I thought it might be a good idea to reiterate one small part of that email.

….of Exposure & Brand Awareness….

I call this part “$1 Million of Quality Exposure and Brand Awareness.”

That’s fairly self explanatory, but as I said it in the email that I wrote to that person that night:

We would have paid literally a million bucks just to have the same opportunities to ‘get the word out’ about our brand that we’ve gotten for free because of what we’ve done with Social Media.

More specifically, here is what I am talking about; these are the actual “brand awareness opportunities/newsworthy events that create positive exposure” that we have enjoyed entirely because of Social Media (and all of these have occurred in the last year):

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  Named as one of Proxio.com’s “25 Most Connected in Real Estate“
• Named as one Inman News’ “50 Most Influential Online“
• Wrote a review of Stefan Swanepoel’s “Social Media Report” which appears on the back cover of the book
• Quoted twice in Stefan Swanepoel’s “2010 Real Estate Trends Report“
• Invited to speak at Inman Connect San Francisco (#ICSF) on arguably the hottest topic in real estate
• Professional One Real Estate selected as a “brokerage of the future” in the #ICSF keynote address delivered by BH&G CEO and Inman News’ “Innovator of the Year” Sherry Chris
• Invited to speak on Inman News’ Agent Reboot tour in Seattle, Las Vegas & Portland
• Written about in Inman News’ feature article following Agent Reboot Seattle
• Invited to speak at #140 Conference Detroit
• Invited to speak at NAR convention in New Orleans

Now I’d be the first to admit that attaching a value of $1,000,000 to these things is completely subjective and arbitrary.

But I don’t think my estimate is completely unreasonable…

…and I do think it’s *probably* a little more apropos than this one (ha ha):

And even in the most conservative view of this, if we were using traditional advertising methods, we would have spent MANY thousands of dollars to obtain anything close to the exposure we’ve created using Social Media…at a total cost…of ZERO.

Even better is that the vast majority of this elevated brand awareness has happened among the population of people we would have hand-picked to target with our message if we’d had the ability and opportunity to do so: the top-tier, tech savvy, Social-Media aware professionals in the real estate industry.

Other takeaways to contemplate:

• The issue I talked about in this post – positive exposure and the elevation of the awareness of our brand – is just ONE of a number of ROI examples I can give you. Others are recruitment of key management personnel, recruitment of real estate agents, attraction of real estate clients and direct personal access to people at the top of the food chain in the real estate industry. I wanted to keep this post under 1,000 words (always a challenge!), so I chose to focus on one specific ROI element
• To further validate the ultimate purpose of this blog post – to show that there IS positive ROI from Social Media  – please check out these other people who are leveraging Social Media very effectively in the real estate space:
  • Dale Chumbley (@DaleChumbley) is leveraging Facebook and a sophisticated “soft attraction” blog concept to build a huge online presence and attract real estate clients in Vancouver, WA…
  • Marc Davison (@100wattmarc) and his partners at 1000Watt Consulting walk softly and carry a veritable redwood when it comes to commanding respect as thought leaders in the real estate game as they roll out one amazing blog post after another after another…
  • Nicole Nicolay (@Nik_Nik) is a one-woman wrecking crew who has created real estate’s ultimate “star”/celebrity profile via the brilliant leveraging of every form of media known to man…
  • Jay Thompson (@phxREguy) is building a real estate company in Phoenix and a monster digital profile largely on the strength of an amazing blog and a consistent, candid, super-respected voice on Twitter…

These are just four of many examples I could give.

Social Media works.

And the body of evidence in support of that thought just keeps growing every day…

In fact, someday, I’ll bet it will be worth…one…hundred…BILLION…dollars!