How CORE Can Help Real Estate Brokers Reduce Risks and Ensure Regulatory Compliance

My friend and colleague JP Endres-Fein, who happens to be the incoming President of the New York State Association of REALTORS, is giving a presentation today at the NAR Conference on how Client-Oriented Real Estate can help reduce risks and ensure regulatory compliance.  I am delighted that she’s bringing the CORE concept to a larger stage, particularly by taking an angle that we haven’t really discussed here on the blog.

As a trainer of real estate agents, my main focus on this blog is writing about how CORE can impact an agent’s career by making her better at her job — delivering better service, creating happier clients, and thereby growing her business.  And that’s really important.  But as a broker with about 800 agents, I developed CORE precisely because I wanted my agents to provide a higher quality experience to their clients — not just because I thought it would be good for business, but because I thought it would be good for eliminating the kind of errors that get brokers in trouble. (It’s at this point I should point out that I’m a lawyer, also responsible for my company’s regulatory compliance).

Here’s what’s always bugged me.  A client can walk into one of my offices today and start working with Agent #1, and a different client can walk into another one of my offices later today and start working with Agent #2, and the two clients can have wildly different service experiences.  Why?  It’s the same company.  The agents have access to the same systems, tools, programs — everything my company provides.  But even so, the client will have a different experience because the agents are different. No matter what I do, no matter how great the systems I provide are, I still rely on an agent to deliver them. If the agent is great, then it’ll be fine.  But if the agent does not pay the same level of attention that I would if I were in that living room giving a listing presentation, or in that car taking a buyer on a showing, or in that conference room managing a transaction, then that client might be getting an experience that I would not be happy with.

That’s a business problem, insofar as I really want clients of my firm to have great service experiences.  But it’s also a regulatory compliance issue, because any time two clients are getting a different standard of care, you run into potential problems.  Here’s a perfect illustration: several years ago, we had a fair housing problem that came out of two testers visiting two offices on two different days and getting two different issues.  It happened that the “protected tester,” the one representing a protected class, just happened to start working with an agent who was not as strong as the agent who worked with the control tester.  So what happened? The protected tester had a worse experience, and perceived it to be based on her protected status.  But my argument was that, quite frankly, any two clients getting two different agents on two different days are going to get a different experience.  Sadly, that’s the state of the industry!

But we need to change that.  You can go into any McDonalds in the country and the fries taste the same.  Any Starbucks, the lattes taste the same.  At the Four Seasons, the rooms always have the same level of cleanliness.  So how do those companies, who have employees without nearly the training background and requirements of real estate agents, ensure such consistent customer service.

The answer is this: those companies have systems in place that employees follow which ensure a consistent delivery of service.  THIS is how you cook the fries.  THIS is how you make the coffee.  THIS is how you clean the rooms.  We don’t have that in the real estate industry.

Why?  A couple of reasons:

First, we don’t train for service.  In the industry, training almost always means sales training — how to generate leads.  Even worse, most of those sales techniques are the worst kind of manipulative nonsense, teaching agents how to exploit clients rather than service their needs.  Alternatively, we have real estate industry training on regulatory compliance, which is mostly at the licensing level and doesn’t teach an agent anything about how to do the job properly — just how to stay out of jail.  And then we have “ethics” training, which is great, except that having good ethics doesn’t mean you’re good at your job.  It’s like a restaurant that gets a clean bill of health from the board of inspection — the place might be clean, but it doesn’t mean that the food is any good.

Second, we don’t innovate systems for service.  We put all our thought and energy into creating innovative new ways to generate leads.  Think of it this way: the real estate industry took to the internet 15 years ago, and we’re pretty much still using it the same way we did back then — to generate leads.  Our websites don’t give clients service, they’re just designed to generate inquiries.  Where’s the innovation on how we actually help people buy and sell houses?  And it’s not just technology, because the most impactful innovation in the industry in the last 30 years was the agent-centric compensation model pioneered by Re/Max.  In other words, we spend a lot of energy innovating ways to make more money, or divide up the pie differently.  But we don’t innovate for service.

Third, we put too much on the agent. We can’t really blame the agents for their inability to handle the myriad responsibilities we put on them.  I have written before about the problems associated with thinking of real estate agents as salespeople, but the upshot is that real estate agents have two big jobs: (1) generate new clients, and (2) service those clients.  And both jobs require a lot of work and specialization.  Most industries don’t put such a burden on salespeople — rather, they break up the sales and service roles. Just look at the mortgage industry: you have one group of specialists to generate business (loan officers) and another to service the client’s needs (loan processors). Different skills, different needs, different people.  If we want the agents to do a better job servicing clients, we either need to take away their lead generation responsibilities or make their jobs easier by giving them help on both selling and servicing their clients.

So what do we need to do?  At my company, we’ve taken a three-pronged approach to trying to solve the “inconsistency” problem with our client service. It comes down to this:

1.  Train for Service

We need to help agents become better at their jobs.  They need better skills, they need better knowledge. We’ve created a whole series of classes built around the idea of competency — how to be better at helping clients buy and sell homes.

2.  Forge a direct relationship with clients. 

Where possible, we have tried to create a direct connection between the company and its clients. It’s amazing to me that so many brokers (including me) have such little interaction with the clients of the firm.  So what we’ve tried to do is automate systems that can generate communication between the company and the client, so that we know that the client is getting the information that we want her to have.  For example, rather than relying on an agent to run an activity report, we’ve automated it for Monday morning delivery each week. Not only does this make the agent’s job easier, but it ensures that the job actually gets done.  Similarly, we’ve written a whole series of “Orientation” pieces for clients that ensure they have been educated about the selling and buying process, rather than relying on the agents to explain it themselves. We’re not trying to eliminate the agent from the process — far from it! — but we are trying to reduce their burden by taking a more active and direct role in servicing that client’s needs.

3. Make agents jobs easier by creating systems to help them deliver better service.

Finally, we believe that we can systematize much of what agents do by using checklists that automate many of their jobs.  We call the checklists “Project Plans,” which are designed for every major step that an agent has to take to service a client: listing intake, buyer representation, transaction management, etc.  The idea is based on concepts that we came across in Atul Gawande’s great book The Checklist Manifesto, which we reviewed here.  The basic idea is simple: using checklists is a great way to ensure consistent execution.  You can identify best practices, articulate them into a plan, and then create an enforcement mechanism to ensure that agents follow it EVERY time, so that every client gets the same level of consistent service.  Honestly, this is still very much a work in progress, but we’re a lot further along than we were when we first introduced them several years ago.


Basically, the whole point of CORE is to create consistently good service, and as such it does have the intended benefit of reducing regulatory and litigation risk for brokers:

  • Better-trained agents make fewer mistakes, which generates happier clients with better results.
  • The checklists reduce the cognitive burden on agents, allowing them to focus on more important things.
  • The checklists reduce errors that could lead to liabilities (i.e., if the checklist requires the agent to check the taxes, you’ll always get the taxes right or at least have a documented attempt of who gave you the wrong information).
  • By making service more consistent, you eliminate potential fair housing problems based on disparate treatment of different clients.
  • And direct broker-client communications reduces the risk of agents miscommunicating compliance information.

If you would like to find out more about what we do at Better Homes and Gardens Rand Realty, or would like some copies of our checklists or other materials, just let me know.


Rules for CORE Agents #21: No News is Still News

You know what the weather is like right now in San Diego? It’s 85 degrees and sunny.  You know what it’s going to be like tomorrow?  85 degrees and sunny.  Next week?  85 degrees and sunny.

The funny thing is, they still do the weather report every day.  Turn on the news, and at some point the San Diego meteorologist is going to come on to tell you that it’s 85 degrees and sunny.  Every day, even thought it never changes.

You know why?  Because no news is still news.

That’s the approach you need to take when setting up contact systems for your active clients: no news is still news.  Even if you have nothing to report, you still have to give them a call with the update. Clients who don’t hear from their agents get nervous that they’ve been forgotten.  It’s important to keep them informed, even if you have nothing new to tell them.

This can become tough to do, particularly with a seller who has been on the market for a while. It’s not easy to pick up the phone each week to tell the seller, “Yup, we had another week without any showings or offers.” The challenge, of course, is to find some way to dress it up, to find SOMETHING new to talk about each week.  But that’s the job!

Think about it from your own perspective. Let’s say that you have a buyer who is in contract, waiting to hear back about her mortgage commitment.  A week goes by. No news. Another week goes by. No news.  You’re wondering what’s going on.  Would it be helpful if the loan officer gave you a call to update you that, in fact, he was still waiting to hear back from underwriting?  Of course it would.  Even if his update was only to tell you that he’d made no progress, that’s still an update.

All those people in San Diego, they want that weather report.  They don’t want to watch a newscast where the attitude is, “we’ll let you know when the weather changes, in the meantime, just hold tight.”  What kind of weather report is that?

Same idea.  Give your clients regular updates, even if you have nothing new to tell them.


This post is part of a series of what I call the “36-1/2 Rules for Client-Oriented Real Estate Agents,” a collection of short takes on the CORE concept that I’ve developed over the years of discussing and teaching the system.  We’ll count up to the 36th rule over the next few months, and then the 1/2 rule.  You can get the full list of rules by clicking on the “36-1/2 Rules for CORE Agents” category on the blog – scroll from the bottom if you want to read them in order.

Rules for CORE Agents #20: If a Client Calls You With a Question, You’ve Probably Already Failed

Your phone rings.  It’s a seller whose home you’ve listed, and they want to know if that buyer over the weekend had any feedback. Or it’s a buyer you’re working with, wondering if anything new came on the market this week.

Guess what? You just failed.  Why?  Because they felt that they had to call you. They had a problem, or a concern, or a question, and they did not feel confident that you would be calling them. By definition, they had needs that you were not meeting.

That’s not the way it’s supposed to work. In the ideal agent-client relationship, they don’t have to call you, because they know you’re going to call them.

That’s the expectation you should always set with your clients: first, that you’re going to contact them on a consistent and regular basis; and second, that you’re going to contact them anytime you have something to report.  They don’t need to ever call you, because you’ve established a system that ensures that you’re contacting them with regularity.

For example, what if when you first met with your clients, you told them the following:

“I think my most important job is to make sure we communicate regularly, so I want you to know I’m going to call you every Monday with an update about what’s going on.  And if anything comes up during the week, I’m also going to call you whenever I have some news.”

Let’s say that after making that commitment, you keep it. You call them every Monday to update them, and call them during the week if you have anything important to tell them.  What does that do?  First, it establishes that you’re going to have a regular phone conversation with your client on Monday.  Thus, if they have any non-urgent issues during the week, they know that they can just bring them up to your on your weekly update call.  Second, they also know that if anything DOES come up during the week, you’re going to reach out to them, so they don’t have to worry about calling you.

This is better for everyone.  The biggest complaint most clients have is that they don’t hear from their agent, which really means that they don’t have a settled expectation on when their agent is going to call them. And from your perspective, this ensures that you’ll always be calling them on your terms, when you’re prepared.  You won’t be fielding (or ducking) random calls during the week when you’re with other clients, or taking time off, or in a meeting, or whatever.


This post is part of a series of what I call the “36-1/2 Rules for Client-Oriented Real Estate Agents,” a collection of short takes on the CORE concept that I’ve developed over the years of discussing and teaching the system.  We’ll count up to the 36th rule over the next few months, and then the 1/2 rule.  You can get the full list of rules by clicking on the “36-1/2 Rules for CORE Agents” category on the blog – scroll from the bottom if you want to read them in order.

Rules for CORE Agents #17: Never Tell Anyone You’re ALWAYS Available For Them, Because You’re Not

So you’re sitting down with a client for the first time, and you’re trying to impress upon them your dedication to a great service experience. You take them through your value presentation, answer all their questions, and you can tell that you’re thisclose to locking them in.

It’s all going so well, so you decide to close them with the one thing you know they absolutely will love to hear:

“When you hire me, I will always be available for you anytime you need me.”

You see their eyes light up.  They’re sold.  Enjoy the moment, because it’s the very last time your clients will ever be happy with you. Why?  Because promising that you’re “always available” is the single dumbest thing you could ever say to a client.

First of all, it’s a lie.  You’re not always available.  In fact, as you sit there with that client, you’re almost certainly NOT available to all your other clients, since your phone is turned off during your client meeting. And next week, when you’re meeting with another new client, you’re not going to be available to the one you’re sitting with today.

Second, you’ve made the tragic mistake of setting unrealistic expectations that you will never, ever be able to meet. You’ve set yourself up to fail.

It’s like training a dog.  You need to establish boundaries: firm expectations for behavior that you want to encourage and discourage unless you want to spend your life picking up poop from your living room.

You have to do the same thing with your clients: set firm boundaries about what they can expect of you. Make sure they know when you’re available, when you’re going to regularly contact them, the kind of information you’ll be sending them.  Tell them what they can realistically expect from the sales experience – the amount of time it will take, what it will cost, what they should look out for.

If you fail to set boundaries and expectations, they will just keep demanding more and more of you until they exceed your ability to satisfy them.  Then they’ll complain that you let them down.  Most clients are reasonable people, and will respond well to reasonable expectations for your performance.

Your job is to establish and then manage those expectations.  Or else your clients will poop all over your living room, at least metaphorically…


This post is part of a series of what I call the “36-1/2 Rules for Client-Oriented Real Estate Agents,” a collection of short takes on the CORE concept that I’ve developed over the years of discussing and teaching the system.  We’ll count up to the 36th rule over the next few months, and then the 1/2 rule.  You can get the full list of rules by clicking on the “36-1/2 Rules for CORE Agents” category on the blog – scroll from the bottom if you want to read them in order.

Rules for CORE Agents #15: Great Service is in the Eye of the Beholder

Let’s say you’re shopping for a new jacket, and you pop into a clothing store.  Immediately, a salesperson comes up to assist you, asking if you need any help and what you’re looking for.  Usually, that’s a great thing, so much better than those times you go into a store and you can’t find anyone to help you because the sales clerks are all in chatting in the back or sneaking outside for s smoke break.

Sometimes, though, a sales clerk coming up to help you is just annoying.  Maybe because you’re just browsing and you’d rather just look on your own.  If you start talking to the clerk, you’re going to start feeling sales pressure – the more time she spends with you, telling you how great everything looks, the more likely you are to buy something that you don’t really need.  Or it might just be that you don’t want to waste the clerk’s time and effort when you’re not really in the mood to buy.

That is, your service experience did not depend on what the clerk did.  The clerk did the same thing BOTH TIMES.  The difference was you, and what you wanted.

Real estate clients are like that: their service experience depends not just on what you do, but what they want at the time.  The key is to figure out how your client wants to be serviced.

Now, of course, some aspects of delivering a good service experience are foundational and universal: a good attitude, product knowledge, communication, etc.  I can’t think of anyone who would want to work with an agent who doesn’t care about doing a good job, doesn’t know her stuff, or drops completely out of touch.  Even a sales clerk who jumps to assist you is useless if she doesn’t know her inventory.

But how you deliver that service experience depends on what your client is looking for.  Some clients want constant attention, and some take a “don’t call me, I’ll call you” approach.  Some want you to do all the work, and some want to look for homes on their own and send you the ones they like.  Some want to talk to you on the phone, and some would rather you just email or text them.  They’re all different, and they all have different needs.

So how do you figure out what they want?  It’s simple: ask them.  Ask them about how they want you to communicate with them.  Ask them how often they want to go out.  Ask them about what their expectations are for their sales experience. Basically, ask them what they want, and then do that.


This post is part of a series of what I call the “36-1/2 Rules for Client-Oriented Real Estate Agents,” a collection of short takes on the CORE concept that I’ve developed over the years of discussing and teaching the system.  We’ll count up to the 36th rule over the next few months, and then the 1/2 rule.  You can get the full list of rules by clicking on the “36-1/2 Rules for CORE Agents” category on the blog – scroll from the bottom if you want to read them in order.

Rules for CORE Agents #14: Happy Clients Are Better Than Any Marketing Program Ever Invented

Real estate agents are always coming up with creative places to put their faces.  It used to be that you’d see real estate agent faces just in the pages of newspapers and magazines, but now you see them on park benches, billboards, shopping carts – really, anywhere there’s a flat surface and someone willing to sell you space on that flat surface for an “affordable” (i.e., very, very large) monthly fee.

That’s all fine, I guess. Brand marketing is important.  I’m not so sure that a face and a slogan like “Let me bring you home” on a shopping cart is a great use of your money, but it probably doesn’t hurt.

But don’t kid yourself.  Brand marketing is an expensive and inefficient way to build your business.  It takes a lot of money and time to build that brand presence, and even then you’re not really likely to generate direct leads from it.  The best you can hope for is that you establish some degree of name recognition in your market.

Here’s a better way: create really happy clients.  Happy clients are the best marketing you could ever have.  Happy clients become referral sources.  They become testimonials and references that help you secure new listings.

And, of course, they create word of mouth. People buy a house, invite their friends and family over to see it, and people ALWAYS ask them about how they found it.  They want to hear the story, and that story is generally going to include the buyers’ impressions of the experience they had buying the house.  If they’re happy, they’re going to tell everyone.  And, of course, if they’re NOT happy, they’re going to tell everyone.  Either way, the word is going to get out.

Now, multiply that experience by everyone who buys or sells a house with you, and THAT, my friends, is a marketing program: happy clients running around the county talking about how great you are.  No amount of money can buy that.

Indeed, in the internet age, happy clients are more important than ever, because instead of just sharing their experiences with their friends and family, they’re actually writing stuff on the internet and sharing it with anyone who Googles your name.  The scary part is that the unhappy clients are even more motivated to find some online review site to talk about how much they hate you.

Bottom line: create happy clients. Instead of writing checks to create a brand presence, put your back into giving great client service experiences to the people who buy and sell with you.  It’s hard, it takes a lot of work, it requires a lot of dedication.  But it’s the best marketing you could ever do for yourself.


This post is part of a series of what I call the “36-1/2 Rules for Client-Oriented Real Estate Agents,” a collection of short takes on the CORE concept that I’ve developed over the years of discussing and teaching the system.  We’ll count up to the 36th rule over the next few months, and then the 1/2 rule.  You can get the full list of rules by clicking on the “36-1/2 Rules for CORE Agents” category on the blog – scroll from the bottom if you want to read them in order.

Rules for CORE Agents #13: Be Good at Your Job

Take a look at a list of the most successful agents in your market and try to figure out what they have in common.  How did they all become top agents?

It’s not easy, because successful agents don’t conform to the superficial stereotypes that we all have of the dynamic “superstars” out of central casting.  Some are charming, others are boring.  Some are loud, others are quiet.  Some are glad-handers, others are back-benchers.  Some are likeable, others are abrasive. Some are neat, others are sloppy. Some prospect like crazy, others never pick up the phone.  They’re all over the map.

So what do they all have in common?  It’s simple. They’re all really good at their jobs.

It’s really that easy. They’re good at pricing homes, they’re good at learning inventory, they’re good at negotiating, they’re good at counseling clients, they’re good at facilitating a transaction. That’s why they are so successful, because being good at helping people by and sell homes is obviously the most important driver of your business. If you’re good at pricing listings, then you’ll sell more of them.  If you’re good at counseling buyers, you’ll get more of them into contract. If you’re good at facilitating a transaction, you’ll close more of them.

Most importantly, of course, if you’re good at your job, your satisfied clients will work with you the next time they need to buy or sell a home.  And they’ll tell their friends to use you. And they’ll write great testimonials that will provide ironclad validation whenever you’re trying to win over a new client.

Conversely, you’ll never be a top-producer if you’re bad at your job. Your overpriced listings will expire.  Your neglected buyers will find another agent.  Your complicated deals will fall apart.  And eventually, regardless of how charismatic and dynamic you are, regardless of how much prospecting you do, you’ll be out of the business.

So take a look at that list again.  What you’ll find is a group of agents who don’t look the same, act the same, or generate business in the same way.  But most of them are agents that you would personally probably hire if you weren’t a real estate agent and needed someone to sell or buy a home.

That’s why they’re top agents.  They’re good at their job.


This post is part of a series of what I call the “36-1/2 Rules for Client-Oriented Real Estate Agents,” a collection of short takes on the CORE concept that I’ve developed over the years of discussing and teaching the system.  We’ll count up to the 36th rule over the next few months, and then the 1/2 rule.  You can get the full list of rules by clicking on the “36-1/2 Rules for CORE Agents” category on the blog – scroll from the bottom if you want to read them in order.

Book Review: Stephen C. Lundin, FISH!: A Remarkable Way to Boost Morale and Improve Results (2000).

Stephen Lundin’s Fish!: A Remarkable Way to Boost Morale and Improve Results quickly became a revered text in modern management styles after its publication a decade ago, particularly well-known for its promotion of “fun” in the workplace to motivate employees.  There’s actually a lot more in the book, though, than just its “fun”-orientation, particularly in its zen-like endorsement of “choose your attitude” and “being present” in the moment.

The lessons imparted in Fish are very simple and provocatively empowering.  The authors assert that employees in the workplace have the power to change their own attitudes about their work, creating a positive environment that will not only be more productive but happier in their lives.

Clearly, these are not novel ideas, but what gives them power is that Fish! uses as an example of this management technique the Pike Place fish market in Seattle, which is known for its lively fishmongers tossing fish to and fro.  The idea is that if these workers, who have very difficult jobs that are not particularly lucrative, can maintain an amazingly motivated attitude about their work, then so can anyone.

The four elements of the Fish! philosophy break down as follows:

1.  Choose your attitude

This is probably the simplest and yet most powerful of the ideas generated in the book.  As the authors state: “there is always a choice about the way you do your work, even if there is not a choice about the work itself.”  Workers choose the attitudes they bring to work: they’re either going to be miserable, or they’re going to be motivated.  If they choose to be motivated, and get in the habit of making that choice, they will be happier and more productive.  If you have to be at work, why not be great at it rather than ordinary?

2.  Play

The second, and more celebrated, element of the Fish! philosophy is to incorporate “play” into the workplace.  The idea is that you can be serious about your business and still have fun with the way you conduct business.  It shows that you’re not taking yourself so seriously, and that you understand the importance of good humor even in stressful situations.  The benefits of play are as follows: happy people treat each other well, fun leads to creativity, the time passes quickly, having a good time is healthy, and work becomes a reward and not just a way to rewards.

3.  Make their day

This is the core service concept of the Fish! philosophy: approach customer service with the goal that you’re going to make someone’s day.  Go out of your way to give someone a memorable experience working with you.

4.  Be present

The Fish! philosophy also incorporates an element of Zen-like attention to being present in the moment.  The authors point out that people in service professions tend to “zone out” in their work.  Because they’re so unhappy, just clock-watching and waiting for their shift to end, they don’t really pay attention to their clients or customers.  They’re not fully engaged in their work.  In the Fish! philosophy, you need to concentrate on being present in the moment, and being focused on the needs of your client.


This is a great book, and one that every successful real estate agent should read.  The simplest advice I’ve ever heard about maintaining a positive approach to business is this: “choose your attitude.” That’s it.  You have control over the attitude you bring to work every day.  If you choose to be positive, you’ll find that it becomes easier every day to become the kind of professional, and person, that you want to be.

Really, all four lessons from Fish! are worth remembering, including everything that Lundin has to say about great customer service.  This is a must read.

Who are your clients? Ummm, your clients, dummy!

Whenever I am at an industry conference, I’ll hear a real estate broker make the observation that a broker’s real “client” is the “agent.”  That is, although individual real estate agents have buyers or sellers who are clients, a broker’s clients are actually the agents: the broker provides services to the agents, who then treat the clients, but the broker’s main role is maintaining that client relationship with the agents. The theory is that the broker does not actually have a relationship with the buyers and sellers, but only with the agent.

This is one of those observations that always seems clever when people say it, kind of a counter-intuitive perspective that is presented as a flash of insight.  Except, of course, that it’s become pretty much of  a cliche, given that I hear it at every conference.

More importantly, it’s wrong.  If you’re a real estate broker, your agents are not your clients. Your clients are your clients.  Your agents are your agents.  That’s why we call some of those people “clients” and some of them “agents.”  

And even more importantly, I think that it’s gone from counter-intuitive clever insight all the way through to cliche and now all the way to a pernicious system of real estate brokerage that elevates the agent above the client in the broker’s perspective.

Put it this way: a great real estate broker provides outstanding client service to buyers and sellers.  The main delivery system for those services is through the individual agents, so the broker does have a significant obligation to empower those agents with tools, technology, and training to provide that client service. And, of course, the broker has to provide a reasonable compensation system to incentivize agents to stay with the broker and do lots and lots of deals.  

But you cannot always serve two masters.  Too many brokers, I think, including me, sometimes elevate the agent at the expense of the client. Here’s an easy example: do you provide dedicated parking at your offices to your agents, or your buyers and sellers?  At our offices, where possible, we have dedicated parking spots in front of the entrance for clients. Why? Because we want to make it easy for clients to be able to park at the offices.  That’s a good client service.  But I know lots of brokers who leave those spots open for agents to park in, because the “agent is the client.”

Of course, this is sort of a cross-industry standard, because you can go to most businesses in the country and find dedicated parking for staff or important employees, but not for clients.  And if you go to any mall in the country at 9AM, you’ll find the first ten rows of parking taken up by employees of stores in the mall, who will squat on those choice parking spots all day long.  

But it’s not just simple things like parking spots.  For example, many brokers, including ours, provides for “call coordinating” of sign calls and online inquiries, which go first to the listing agent.  This can be considered a good client service for the seller, who is probably best served if an inquiry is delivered to a listing agent who has a tremendous incentive to try to sell that listing.  It also can be considered good customer (not yet client) service to the potential buyer making the inquiry, since the inquiry is directed to an agent who really knows the property.

But in a lot of cases, this is actually bad customer service for the potential buyer, made in the spirit of the listing agent being the client of the broker.  Although sometimes online inquiries are made about a particular property, at other times the inquiry is spurred by that property, but the customer would be better served by talking to an agent who is sitting in front of a computer and can dedicate as much time as necessary to fielding that call.  Instead, the inquiry goes to a listing agent, who is likely out in the field, with clients, or otherwise distracted and occupied.  It’s a good service to the listing agent, good for the seller, not necessarily good for the person making the call.

This is not to criticize call coordinating, but simply to give an example that treating the agent as a client is not always in the best interests of the buyer or seller who are the actual clients of the company. This one’s a close call, but only if you actually think that people who call into your company deserve the best treatment possible. If you actually think that your agents are your clients, then it’s an easy call.

Finally, while I understand the impulse to treat agents, particularly productive agents that drive the bottom line, as the clients of the broker, I don’t see why service to agents should come at the expense of the client.  The idea that you have to choose between treating your agents/employees as clients, or your buyers/sellers as clients, is a false choice that sends us down the wrong path.  I don’t think you can have a great client service company without providing great tools, training, and technology for your employees (or in real estate, your agents).  

Inded, other industries do just fine in adopting client-centric approaches that actually empower employees and treat employees fairly without adopting a “employees are the client” standard that we hear bandied about in real estate. For example, Zappos is one of the gold standard companies in providing great client service, but Zappos also has a legendarily empowering employee culture. In fact, the great client experience wouldn’t exist without that employee culture.

A great real estate company should be able to recognize that the buyers and sellers are the clients, and provide amazing services to those clients through an empowered, trained, and motivated workforce.

Book Review: Atul Gawande’s The Checklist Manifesto: How to Get Things Right — Achieving Operational Excellence in the Real Estate Industry

Atul Gawande’s The Checklist Manifesto is a  powerful book, one of the best and simplest articulations of how to achieve operational excellence that I have ever read.  Gawande’s message is simple: the world has become increasingly complex, and we need to actively create systems and processes that will simplify the tasks that we have to complete in our everyday lives.  His deceptively modest proposal: use a checklist.

Now, I know that seems almost stupid and simplistic at first glance.  We’re all familiar with checklists, and generally associate them with rote tasks, not with complicated procedures.  And we resist the idea that our professional performance could be improved by something so jejune as a checklist, almost as if a checklist would trivialize the important work we do.

As Gawande points out, though, that’s exactly the way a bunch of doctors felt the first time that a hospital administration tried to incorporate a checklist into one of the most common of medical functions — putting in a central line.  He recounts how a critical care specialist at Johns Hopkins Hospital devised a checklist to try to avoid incidences of infenctions in the placing of a central line.  Doctors all knew the basic steps for central lines: (1) wash hands with soap; (2) clean the patient’s skin for the placement; (3) put sterile drapes over the patient, (4) put on a mask, hat, sterile gown, and gloves; and (5) put a sterile line over the insertion site after placing the line.  Gawande called these steps “no-brainers,” the type of things that doctors know they are supposed to.  But the hospital found that in one third of cases, doctors were skipping at least one of the steps.

So the hospital initiated a simple checklist procedure to ensure that all the steps were taken.   Since the doctors were resistant to the intrusion, nurses were enlisted to ensure compliance with the checklist.  What were the results?  According to Gawande, they “were so dramatic that [the administrators] weren’t sure whether to believe them.”  The ten-day line infenction rate went from 11% to 0%.  Over a fifteen month period, the administrators projected that the checklist had prevented 43 infections and 8 deaths, saving over $2 million in hospital costs.

This was not an isolated result.  After the success at Johns Hopkins, Gawande recounts how hospitals in Michigan initiated a project to use a central-line checklist in intensive care units (ICUs) in hospitals throughout the state.  Here are the results:

Within the first three months of the project, the central line infection rate in Michigan’s ICUs decreased by 66%.  Most ICUs . . . cut their quarterly infection rate to zero.  Michigan’s infenction rates fell so low that its average ICU outperformed 90% of ICUs nationwide.  In the …. first eighteen months, the hospitals saved an estimated $175 million in costs and more than fifteen hundred lives.  The successes have been sustained for several years now — all because of a stupid little checklist.

These are among the powerful illustrations of the effect of checklists on operational performance included in The Checklist Manifesto.  In addition to the medical field, Gawande shows how pilots use checklists to ensure safe operation of aircraft (including an engaging description of how checklists impacted the famous “Sully Sullenberger” flight that landed in the Hudson River in 2009).  And he demonstrates how hedge fund investors use versions of the checklists to protect against making poor investments, including one vivid illustration of an investor turning down an opportunity when a checklist item turned up that the company’s owners had been divesting their personal holdings.

So how does this impact the real estate industry?  I think that our industry could learn a lot from The Checklist Manifesto about operational excellence.  The role of the real estate agent is significantly task driven, but those tasks can sometimes be overwhelming.  Just getting a listing on the market can require dozens of discrete operations: taking pictures, uploading pictures, writing descriptions, checking paperwork, ordering signs, inputting property data, double-checking taxes, etc.  We need to do these things every single time, but rarely do we see a company articulate a simple checklist to ensure that every listing gets that quality service.  The same holds for the far more complicated but necessary task of maintaining ongoing listings, when agents tend to get lost in the frenzy of daily activity and neglect the day-to-day communication and updating responsibilities they have to existing clients, leading to poor client experiences.

For the last year, my company has been working on identifying the “best practices” in the industry — the practices that ensure a quality client experience for both buyers and sellers,  with the idea of coordinating those practices into a series of checklists and a comprehensive  “Project Plans” that cover particular aspects of the real estate transaction.  The goals is to provide with a set of plans that can guide them through the transaction.  The point is not to limit them — people can always do more than is on the plan.  Neither is the point to demean their professionalism– it’s not that we think they’re NOT doing some of these things, but we believe that in a given case they might not be doing ALL of these things because of the overwhelming complexity of the entire task.

Most importantly, we think that these kinds of checklists make a job easier, by simplifying our lives.  Just like computers, we have only a certain amount of “RAM” in our heads.  Computers gain efficiency if they can move information from “RAM” to hard drive memory.  Similarly, most of us become more efficient if we don’t have to store tasks in our memory, but can reduce them to a hard copy that we can refer to anytime we need them.  An agent with a 30-item checklist for getting a listing on the market is going to be more efficient than an agent who has to remember all 30 tasks and whether she’s already done them.  (And it’s definitely more efficient for the agent sitting at the desk next door, who keeps getting a tap on the shoulder asking, “hey, what am I supposed to do next?”)

Finally, real estate professionals should recognize that if checklists can improve execution and performance in life-and-death situations involving surgery and airline flight, and in million or billion-dollar financial investing decisions, then they certainly can be used in the much less urgent field of real estate.  A real estate agent who feels that checklists are “beneath” her should be at least a little chagrined that pilots and doctors are using them to great effect.

Essentially, I think that The Checklist Manifesto should be required reading for real estate professionals; indeed, I would recommend the book for anyone who cares about achieving operational excellence in his or her field.  If you need proof, I’ve already purchased 50 copies of the book at my company’s expense for distribution to our management team, and have saved others as gifts for colleagues in the industry.  It’s a great book.  You should read it.

If you’re interested in some other information about the book, here are some links:

Atul Gawande’s home page for The Checklist Manifesto

144 Reviews (average 4.5 stars out of 5) on Amazon.

Steven Levitt, the author of Freakonomics

Malcolm Gladwell, author of The Tipping Point, Blink and Outlier.

New York Times review

Washington Post review.

Interview in Time Magazine.

Gawande interviewed on the Daily Show with Jon Stewart.

The Safe Surgery Checklist illustrated in a terrific clip from NBC’s ER.