Except for your kid’s university education, the next most expensive thing many people buy, outside of a house, is a car. Between buying a house and a car, between houses and cars, between car salespeople and real estate agents there are a lot of similarities, but more differences. Below is a discussion of this.
I was surprised when looking for a new car the first time that the car lots aren’t open on Sundays. Every other retailer is open on Sunday, but not car dealerships. Weird.
Sunday 2:00-4:00 has long been the most popular time for real estate open houses. I read recently that within the next ten years this will likely be changing. Now that we have the internet, open houses have lost what was once their raison d’etre. They were traditionally home shoppers first viewing of a home. Now the first viewing takes place online.
I always chuckle when people ask me if I work on Sunday. “Of course I work on Sunday”, I say, “I’m a realtor.”
Balloons and Purina Checkerboard slacks
I don’t know why some salespeople try to create a carnival atmosphere for such serious purchases. Maybe they believe that old P. T. Barnam bit, “there’s a sucker born every minute”. Balloons are for kids’ birthday parties, not for car antennas and open house signs.
You are an open book
It does not matter what you say, your body language and behaviour give you away.
Everyone is “just looking”, but we can tell by your actions how far along the buying or selling curve you are. Spend more than 20 minutes in a house, you are interested. Check the real estate websites, portals and blogs more than once a day, you’re getting closer. Invite us over for a home evaluation, you’re selling sometime soon. Attend an open house on your street, you’re just killing time.
With cars, salespeople check the potential trade in to see how much gas is in the tank. Where you park on the lot gives you away too. According to 10 confessions of a car salesman, “There’s a place at the end of our lot we call ‘Laydown Lane’ because the people who park there are too timid to park out front. They’re either total ‘laydowns’—which means they buy whatever you want for whatever price—or they have extremely bad credit.”
Words and vagueness
And what you don’t say is as important as what do.
For example, if asked, “Are you pre-approved for a mortgage?” the correct answer is, “yes”, or “no, not yet”. The wrong answer is, “that won’t be a problem”. That means “no”, and that it might be a problem. It also means that you are just getting started on your home buying journey.
If you ask a money question, we know you are not interested in the house. That’s too easy, too logical, too superficial. Great questions are the emotional ones, the thoughtful ones, the unexpected ones. The same goes for questions about the square footage, how many days on the market or the age of the roof. Number questions are small talk only.
If you talk about taking out a wall, it is not the right house for you.
If you start verbalizing where your furniture will go, we know it will never see the inside of this house.
For sellers, “Do you think now is a good time to sell?” means you are ready to sell but maybe you think you can get more if you wait. Maybe you can, but you are not going to be waiting, are you?
Same, same and like, like
I hate to compare realtors to car salesmen, but many buyers do, so I will for the sake of this blog post. For the record though, although it is pretty easy to get a real estate licence, car salespeople don’t need any licensing. They don’t even need a driver’s license. Car salespeople are closer to retailers, and real estate agent are more like financial advisers.
You are what you is
Realtors have classifications of clients You are buyers and sellers and within those broad classifications we have relocators, investors, first-time homebuyers, FSBOs (private sellers) and sometimes first-time home sellers.
We also have time vampires, see-mores and lookie-lues. Time is money. Busy realtors sometimes have to decide, who is going to buy (or sell) and who is not and who is going to get our attention.
We also have new agents, a revolving door of new real estate agents called “newbies” or “noobs”. They have lots of questions. They try really hard. They’ve got it all figured out. Most everyone avoids them, everyone including other realtors, brokers, neighbours, family, friends and eventually even their online friends.
Car salespeople call car shoppers, tire-kickers. If you don’t have credit history, you’re a “ghost”. If you are a “time vampire” with a realtor then with a car salesmen you are a “stroke”. One-legged shoppers are customers without their spouses and a built in excuse of why they cannot buy today.
Getting invited over to do a home evaluation when only one spouse is present means you’re not getting the listing, not today, not ever.
There is little loyalty with shoppers. They are out gathering information. They might be ready to buy. They might not be. Car salespeople know this. They have one chance to get the sale. If the customer leaves the showroom, they are gone. Same for house sellers. After the listing presentation, they are either going to sign on the line or they are going to list with someone else, or not sell at all, at least not anytime soon.
Amongst car showroom salespeople there is not a lot of love lost. They operate in a world of scarcity. There are only so many customers and too many salespeople. Their bosses encourage “healthy competition”. If someone is getting fatter, it means that someone else is getting thinner.
Cutthroatedness exists at some real estate brokerages too. When realtors have to carry a heavy load of desk fees and other brokerage cost, or have a heavy advertising presence, or are faking it until they make it, spending big money on fancy cars, clothes and haircuts, they need to make the sale.
Averages and commissions
The average car salesperson makes about the same as the average real estate agent and it is less than you think – about $45,000 per year.
Real estate agents and car salespeople are operating without a net. It is 100% commission for us. We could work 40 hours a week for weeks and weeks and months and months without making a sale.
When I was travelling, backpacking around Europe and Asia, we used to always say that hassles make the best stories. People like to talk, tell stories and the best stories seem to be when something bad happens.
There is a lot that can go wrong in real estate transactions. There are a lot of new agents and there are a lot of consumer misconceptions about the way things work.
Real estate agents too, by doing what is in the best of their clients are in conflict with the other agents doing what is in the best interest of their clients. There is not a lot of harmony in negotiations. There is a lot of conflict.
When mistakes happen or when things don’t work out the way clients want or when communication between agents and their clients is not perfect, client complain. Hassles make the best stories.
Car sales people, lawyers, and politicians, are never ranked well.
The internet is taking away their jobs away
I’m talking about car salespeople, not realtors. The information consumers need is online. Cars are mass produced and interchangeable. We don’t need salespeople to “help get us into this car today”.
Houses are unique. Neighbourhoods and schools, amenities and transportations routes, issues like landfills, future developments, appreciation rates… all contribute to making purchasing a home much more complicated that purchasing a car.
Homes are an appreciating asset. Cars depreciate.
Since we are talking about cars and car salespeople in relation to homes and real estate salespeople, lets talk about Uber and the uberfication of real estate.
Driving taxi is not a great job. The hours are terrible and long. It can be dangerous. The pay is pretty lousy too. The only thing it really has going for it is that you can make your own hours. However that usually means you work all the time. Real estate is like that too.
Uber though, disrupted the taxi industry, just like online bookings disrupted the travel industry, just like streaming video disrupted the video rental industry. I could go on…Uber changed the game.
A lot of people, myself included would like to see the real estate industry disrupted. Unfortunately, it cannot be Ubered. Here’s why:
Uber me, Uber you
Relationships vs transactions
Real estate is a relationship business, whereas hailing a cab is a transactional business. There is lots to learn when buying or selling a house. You have to rely on good advice and professional service to get the job done.
With a ride to the train station, you don’t really need to get that involved.
Cars and houses
Do you really really care that much about the condition of the car taking you home from the airport? You are only going from point A to point B.
Houses are different. You know you are going to live there for at least five years, maybe 50.
If you have “walking around money” you can hail a cab, or book an Uber driver to pick you up. You have to have a job and good credit for a house.
Cast of characters
If you hail a cab to a real estate transaction, you are going to need room for your agent, your lender, your home inspector and maybe your insurance agent, your parents, your contractor…