Entry by Lester Langdon

If Real Estate Is Not a Relationship Business, What Business Is It?

I know you’re working at marketing my 3BR/2BA colonial… but I just don’t want to be in a relationship with you…

Over at Inman Next, Chris Smith stirs the cauldron up with a post entitled, “It Is No Longer A Relationship Business – Here’s Why“:


Where I disagree is in the stance that I want to have a relationship with my Realtor.

I don’t.

In fact, I can’t even imagine it.

My argument is that I am not alone.

Unlike a lot of the general public, I have a high level of respect for your profession.

I know how hard you work.

I know how unappreciated many of the things you do are.

I know the stress and challenges that come along with earning a paycheck and paying your bills ONLY if you sell things.

I have met countless Realtors both in person and online that have blown me away with their sales ability, marketing savvy, brand building skills and digital media efforts.

While many would never put the career Realtor along side other careers like Doctor and Lawyer which require significantly more education, I would.

It still doesn’t make me want to have a relationship with you. (Emphasis in original)

Read the whole thing. And people say I stir the pot….

In any event, not being a real estate agent, I don’t have a whole lot to add. I don’t know if RE is or is not a relationship business. But I am a strat guy, a general commentariat talking head guy, and so on. And I did have some questions for Chris (and others) which I asked over on his blog. It seems to me that what I’m asking needs a bit more elaboration, so here we go.

My Question  

What I asked was, essentially, if real estate is not a relationship business, then what sort of business is it? Chris responded thus:

From post “I view buying or selling a home as a transaction” A huge one thus the Doctor or Lawyer juxtaposition. I also vie my interactions with those professions as transactions not relationships. Just my personal belief of course.

I think the juxtaposition of law or medicine is a good one to draw out the difference. Medicine and law both are inherently “skill businesses” in which the said business attempts to sell its services on the basis of expertise and skill.

The problem is that laymen have a tough time evaluating claims of expertise and skill by professionals like doctors and lawyers. Unless you went to medical school, or can watch the doctor in action, how the hell are you supposed to know that your heart surgeon is in fact skilled?

Same thing with lawyers — unless you’re an attorney, or have the requisite education and experience, would you know how to evaluate a lawyer’s summary judgment motion papers?

So both doctors and lawyers resort to other things, markers of expertise and skill. For example, they might trump their education: law firms hire at elite universities and elite law schools so they can say to potential clients, “Hey, we got a bunch of smartie pants from Harvard and Yale, so you can trust that we’re experts with awesome law skillz.”  Doctors display their diplomas from Harvard Medical School in the office, or proudly proclaim that they are Board-certified, or some such. Both likely talk about their years of experience, or how they’re one of the pioneers of laser-guided robotic surgical procedures, or tout their win percentages in lawsuits, or something.

The point is that all of the marketing revolves around expertise and skill.

With real estate (yes, yes, there are always exceptions…), the marketing revolves around not expertise and skill, but notions of service and trustworthiness. Your typical agent website will talk about how much she is devoted to the client, about how great she is at communication, about staying in touch, about highest customer service, and so on. Of course, you get the requisite nod to how the agent is an expert in handling transactions and such. But proof statements are few, far in between, and not necessarily convincing.

After Relationships?  

The reason why “relationship” was such a dominant theme in real estate marketing, I think, is this focus on service, rather than on expertise.

Who knows why things developed this way? I can speculate that perhaps real estate is fundamentally a “low-skill” industry; I put that in quotes because I am not suggesting that it’s easy to do real estate brokerage. Indeed, it is very difficult. Some agents are really quite skilled, they’re experts in the real estate transaction, in the local market conditions, in property marketing, negotiations, and so on and so forth. But I am saying “low-skill” because compared to other professions, real estate does in fact require far less in terms of technical knowledge and skills. No one would think to diagnose himself and craft a treatment regime to deal with that painful hacking cough; few people know enough law to want to represent himself in a major lawsuit. But consumers do look at what they see real estate agents do and think, “Hey, that can’t be that hard, can it?”

The seven-year cycle is also a problem, right? I go to my doctor several times a year. And maybe he treated me for my sprained ankle last year, and now I need someone to help me with a broken arm. I can evaluate my doctor’s seeming expertise and skills at least from a layman’s perspective, as I continue to use more and more doctors. With real estate, I buy/sell a home once every six or seven years. It’s impossible to even get a frame of reference to evaluate agent skill.

Of course, the industry itself isn’t exactly skill-centric. You never hear anyone winning REALTOR of the Year at some local Association banquet because she did some truly creative negotiations on a complex short sale with international buyers. You never hear, “Oh man, did you see that reverse-engineered marketing technique Jane used to sell 123 Main Street for 10% over asking? It was mindblowingly innovative! She’s a real pioneer, that Jane, even if she only sold three houses last year.”

99.99% of the time, the REALTOR of the Year is selected on the basis of (a) production, (b) political contribution to RPAC, or (c) both. And let’s not even get into the whole #RTB deal, where brokers and agents are always slamming each other for low standards.

So here’s the real nub of what I’m curious to know.

If “real estate used to be about relationships” because it was, at its heart, a service-business rather than a skill-business… what is it today? And if the answer is, “real estate is (or needs to be) a skill-business, the way law and medicine are”… then consider the wide-ranging changes that would need to occur throughout every level of the real estate industry.

What I’d Want from Chris Smith (And You)  

With all that said, I asked Chris for some specifics regarding the “post-relationship” real estate world. With the above examples in mind, then, I suppose I’d like to hear some ideas on how skill-based real estate agents would compete with each other. What sorts of proof statements would realtors use (e.g., lawyers might boast of some elite law school, doctors might talk about being Board-certified)? How would compensation work in a skill-based real estate industry, vs. the service-based one we have today? What would awards be based on?

There are hundreds of other such questions that can be asked. And that’s assuming the answer to post-relationship real estate is “skill-based” real estate. I’m not sure that’s the case. Maybe post-relationship real estate becomes a “design-and-marketing” industry, like say, fashion or luxury goods.

In any event, I hope that clarifies the conversation I want to have on this topic

Reprint from Notorious-rob.com               by Rob Hahn



Really interesting discussion Lester. Thanks for bringing it to out attention.

I wrote a ranting blog a few years ago called "Real Estate is a Relationship Business - Not Exactly!" which generated the most comments of any I'd ever written. The gist of my blog was that ANY business is a relationship business in that you need people to be willing to hire you/use your service, but that's not what we're paid for - or shouldn't be anyway. Here's a link if anyone wants to read it: http://activerain.com/blogsview/1307192/-real-estate-is-a-relationship-business-not-exactly-a-rant-

I remember that blog Jennifer - thanks for reminding us that it's our competence that we should be hired (and paid) for. If you're in the "relationship business" it becomes very difficult to treat your business as a business.

I love the boys, drama queens strike-outs!

ACREs: if you haven't checked out Jennifer's blog - do so! Interesting comments too!

Perhaps there is some confusion between "relationships" as pertains to marketing for business, and the "knowledge, skills, and duties" of the profession.

  • Relationships get the "leads"
  • Skills and knowledge gets the "jobs"
  • Excellent Performance of the duties on the job builds a more solid relationship which may produce referrals.

People tend to hire Realtors they know, and probably everyone knows 5 or 6 Realtors. They may hire the best of those, or they may hire the one with the closest relationship (ex: bridge playing friend, who may also be the worst Realtor).

If through the relationship building process a good Realtor is able to demonstrate his/her skills in a non-sales-type manner, then that Realtor may get the job instead of the one with the closest relationship.

Therefore, in the marketing context, relationship building is extremely important. That's why people blog on ActiveRain; hoping to build relationships with Realtors in other states to attract referrals.

Also, to build a public following who continuously read the agents blog. The reader may never comment on the blog, however, the Realtor has built a lasting relationship with that reader who is seeking information. When that reader needs a Realtor, then that author, if local, has a good chance of getting the job.


I'm confused. Is your belief Real Estate Agents and Broker are skilled technically or not? I'm not sure if I will clear it up for you, but here I go. I have been a licensed Agent/Broker for more than ten years now. Over that period I have sat for licensing exams once to become and Agent and twice to become a Broker in both Minnesota and Illinois. The exams are not optional and the have nothing to do with marketing a home or how to development a nicey-nice relationship with the general public. In Illinois every Broker after receiving their license is required to take a Broker Management Course. What follows is the introduction to the text that is used in the Illinois Broker Management Course. "This course was created as a result of Senate Bill 2887 (PA) 93-0957, which was sign into law in Illinois August 19, 2004. The bill contains several important revisions to the Illinois Real Estate License Act of 2000 to promote greater professionalism and accountability within the industry and to provide greater protection for real estate consumers." In this paragraph alone any informed consumer could get an idea that we may have some serious issues here. What I'm trying to point out here is that just because a consumer doesn't hear it or see it when we are in their presents performing the services that we (Professionals in the industry) provide to them when they Contract us to Represent them, doesn't mean that there is nothing else to the process requiring professional skill. Let me continue with more of the introduction. "The textbook is divided into five major sections covering brokerage licensing, agency, office operations and escrow accounting, risk management and disciplinary actions. A special focus is place on opening and managing a brokerage office." Here's a question can anyone not licensed as an Broker tell me the requiremenst set out by Illinois state law for agency representation? When consumers decide to sell or buy on their own without an Agent they are not held to the same standards as someone who has been licensed by a particular state. But, that in and of itself does not relieve them of all issues concerning the sale of real estate. I would suggest that anyone interested in knowing what some of the pitfalls are when a home owner and buyer take it upon themselves to enter into a real estate transaction to call and speak to a real estate attorney. I can guarantee you that they'll have endless horror stories to tell. Real Estate Agent and Broker are required in most state to carry Error & Omission insurance. We are required to take continuing education classes every year. Once again not on how to market real estate, but as example ethics, agency, fair housing and antitrust laws. Ask the question, how does that relate to helping someone sell or buy a home. Trust me it does. When I am hired to help a consumer to sell or buy on their behalf they become my client and they are now the principle and I become their fiduciary. This has serious implications concerning law based agency representation. Now, hire someone that you plan on not having a relationship with to do this for you and let me know how it turns out. William Watkins Broker/Owner Wisdom Realty

After reading Billy's comments, how in the world can it be clearer to our industry that we should not be salespeople? Our highest obligations, stated in law by out national and state organizations, is providing fiduciary guidance, counsel, and care. NOT in moving product. If the industry wants to continue to call us salespeople (and pay us that way), then we have no business being fiduciaries.

Forgive my rant (but many of you have heard it before!)

Enjoyed reading this, interesting discussion. So it would seem that to be successful over the long haul in our business, there are two necessary skills. One is the ability to build relationships with people and equally important is skill level. Both require ongoing focus, relfection and more focus.

There are several ways to demonstrate my value. 

1)   Tell prospects how you spend your time and the tasks you perform

ACREs already use a Needs Analysis, which itself demonstrates our value.

Additionally, with the Sellers Needs Analysis, I include a pdf file with 209 tasks to SELL a property

With the Buyer Needs Analysis, I include a pdf file with 187 tasks to BUY property.

If you want to see these, just send an email to


or go to


the password is   needs

2)   Expert videos

One of my plans to demonstrate and market proof of expertise and skill, is to create a series of one minute videos to be published on my website.

I say one minute because I naturally will want to make longer discourse about this event which affected my life dramatically (so I thought at the time)

They will be entitled "Whines and Rants". 

Each one minute ?? video will be about a nightmare transaction or client and will discuss the nightmare associated with that experience. 

Maybe on occassion I will mention pleasant transactions which occurred because I pulled a rabbit out of a hat or because I performed a miracle and caused a pleasant experience for all parties.

On YouTube.com I can make a playlist of ten short videos which will demonstrate my cunning miracles to those consumers who do not know how Realtors spend their time.

Here is my playlist for Houstonius


I must admit that some are slightly off topic and I need to add the playlist with more “Whines and Rants’ and nightmares.

3)   Be prepared to send links about important and pertinent information

Additionally, I have a blog which has important categories

Legislation –  rules and legislation with affects buyers and seller of property in my niche.


Important resources and – links to county flood maps, City gov’t links to underground utility maps, garbage pickup dates, Police crime stats, map of future metro rail construction, etc, etc.


Market updates – stats on what’s cooking or not hot.



4)   Have a Google map graphically show locations of my transactions in my niche.

If you are a new agent, use the transactions done by your brokerage office. (which could be hundreds)

(does not include those not in my niche, although it could)

Lester Lanngdon has SOLD 65 Multifamily apartment properties – click to see list and map

It is free at http://batchgeo.com/

You may have to adjust the pins locations in the map.


I am open to your new ideas.


This page contains a single entry by Lester Langdon published on September 10, 2011 1:18 AM.

Business Practice Workbook was the previous entry in this blog.

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