Dirty Laundry in public view
My participation in a New York Times Magazine pictorial, “Ruins of the Second Gilded Age” has drawn flack from a number of readers, including Russ Pruner, head of Shore & Country Real Estate. I like and respect Russ and I especially like the team of professionals he’s attracted to his firm, so I’m not happy that I’ve upset him.
But his complaint that I am letting people in on the big secret that we have a large inventory of untold homes is a little ironic because it’s his firm that has compiled a thorough statistical database that anyone who’s interested can access and see what’s happening. I’m not just “telling it like it is” – I’m telling it like Russ says it is. So where’s the beef?
The Greenwich real estate business operates in a time warp, shaped by the world of just twenty years ago, when all information about houses, prices and inventory was hoarded by agents and passed along to customers on an as-needed basis. There was no multi-list, no central repository of information accessible to the public and, not surprisingly, realtors liked it that way. If you wanted to buy a house, you had to do it through a realtor and she would tell you whether it was on a good street (always), a good buy (always) and whether there was anything comparable (usually not).
The MLS and then the Internet changed all that – information became free and everyone could get it, despite the best efforts of the Greenwich Association of Realtors to prevent it (did you know that Greenwch’s MLS is available only to members, and that agents from other towns can’t access it unless they pay thousands of dollars annually to join our membership?). These days a buyer checks out Zillow, Trulia, Realtor.com and any number of other sites to learn what’s for sale. They can check RealtyTrac or Foreclosures.com to see who’s in trouble, they can use Russ Pruner’s statistics (or Raveis.com) to learn whats available, what’s selling, for how much, and how sales are doing compared to years past. If realtors are to survive, they will have to transform themselves from being mere keepers of the keys to being providers of information unavailable on the web, and a source of expert opinion on value. I think a lot of my peers are uncomfortable with that prospect.
Clients of mine recently received an email from another agent who had signed them up last year as buyers at an open house. That agreement expired and the buyers asked me to accompany them back to the same house, still for sale, and to represent their interests. The first agent was heartbroken and confused. “Didn’t I answer all your questions?”, she demanded, “wasn’t I there to unlock and show you the house whenever you asked? What part of my hard work on your behalf don’t you appreciate?”
Well, several things. The buyers wanted to know what had happened to prices since they’d bid on the place six months ago. The agent couldn’t tell them. They wanted to know the impact of several near-by “municipal improvements” and the agent couldn’t, or wouldn’t tell them. When I walked them around the house, I pointed out that this “new” house, vacant for two years, was already rotting and crumbling, that the builder had used interior plywood on the crawlspace ceiling and it was already delaminating. The first agent never mentioned the rot and I doubt ever entered the crawlspace in the year she’s had the listing. So her value was limited to having a keypad to unlock the door. An untrained monkey can accomplish that, and doesn’t demand $50,000 to do it.
So if we agents want to keep earning large paychecks, we have to provide value. A part of that value, as I see it, is telling the truth about market conditions. A Pollyannish insistence that everything is fine, there are no troubles in beautiful Greenwich and everyone should buy right now at the price so carefully selected by the seller and his agent contributes nothing and is worth nothing.
As I mentioned, the irony here is that Russ Pruner is exactly the new type of agent who does bring value to a transaction, so I can only surmise that his miffed reaction to my spilling the beans is based on his past role as President of the GAR and not on his personal philosophy. Whatever, the agents who are angry at me are a doomed breed. As a very good spec builder who, sadly, will be building decks instead of houses for the next few years as he recovers from the bust told a mutual friend, “I used to hate Chris but damn it, he’s been right about everything he said would happen.” I claim no special knowledge, just an ability to compare inventory with sales and economic data and draw logical conclusions. Lots of agents can and do do that. Those who think that the key to their survival is to continue attending Greenwich Garden Club luncheons and telling their friends that everything would be just fine if nay-sayers would just shut up will, I hope, find themselves with much more time to tend to their gardens.