Yes, I’d rather write a blog post than watch the Super Bowl. This year marks the 46th year that I’ve missed the Super Bowl. I believe I hold the world record for males not watching the Super Bowl. As a process engineering guy I just can’t get past the fact that you have to spend 4 hours to watch 1 hour of action. Way too much non value-added activity. I’ve always thought they should just film the entire game and then compress it for general consumption.
On the other hand I love the Super Bowl commercials and the half time shows and since I’m a huge Madonna fan (the woman is a genius) I’m recording this year’s half time show for later playback. Meanwhile, I heard about the Century 21 super bowl commercial that attempts to propagate the ancient myth that there is a tangible difference between brokerages and that some realtors have magic dust. They had to have spent a small fortune on it since just the 30 second air time alone cost $3.5 MM plus they had to pay Donald Trump to play the fool (a real stretch for the guy) and then there are the production costs. Fortunately, I was able to just catch the Century 21 Super Bowl commercial online.
So, here’s the question: Did this Century 21 Super Bowl commercial convince you that their agents are smarter than the average bear?
OK. I can’t help myself. I know the answer to my own question. The notion that there is any difference between real estate brokerages is total BS – just another one of the myths and lies propagated by the real estate industry. As I’ve pointed out before all you need to know is how the real estate industry works and you can figure this out for yourself. The brokerages have two sets of customers. Home buyers/sellers and real estate agents. That’s right. Real estate agents are customers of the real estate brokerages. Real estate agents are not typically employees but rather independent contractors that represent a source of business for the brokerages. There is no real cost to having additional agents, other than some minor training costs and some occasional desk space, so the brokerages will “hire” any agent that can fog a mirror because they represent a source of incremental business. In addition, the various brokerages have no quality of service standards, which is why the service level in the industry is notoriously poor.
My own personal experience interviewing with the various brokerages when I first got my license confirmed this fact. Only one brokerage even bothered to interview me. For all the other brokerages I was interviewing them. The one brokerage that really did interview me was solely focused on how many people I knew and how I was going to market to them.
So in this environment brokerages compete for agents with different commission splits, training, fees, and resources and agents routinely move from one brokerage to another. The guy working for Century 21 today was probably working for Coldwell Banker yesterday. So how can there be any real difference between the brokerages?
If you’ve been reading my blog for any length of time you know that I have the data. A year or two ago Coldwell Banker ran a commercial about some JD Powers and Associates survey that ranked them at the top for either buyers or sellers – can’t remember which and I’m too lazy to look it up but I believe it was the 2009 survey. In this commercial the talking portraits of the founders were discussing the results and there was some kind of high security system in place guarding the JD Powers award.
So I went back and studied these annual JD Powers surveys of real estate brokerages and it is absolutely clear that a) there is no material difference between the brokerages and b) the rankings randomly change from one year to the next. Check out the results of the 2011 JD Powers real estate brokerage survey in the two charts below.
It should be clear from these charts that there is no real difference between the satisfaction survey results for these brokerages. Interestingly, JD Powers uses a truncated scale to display their results, which exaggerates the differences between the data values. That’s a presentation no-no.
On the other hand I was really impressed with the Telaflora Super Bowl commercial but that had nothing to do with real estate. I’ve already ordered $4000 worth of flowers for my wife.