Real Estate Is Different
Published Monday, November 13, 2017
When you’re considering a real estate career, it’s important to recognize and understand the differences between the real estate industry and others. To begin with, although we’re called brokers and agents, ours is different from the typical brokerage. Let’s take stock brokers, for example. If you want to buy some stock, you would typically call your stock broker. After he tells you what the stock is trading for, and you tell him how many shares you want to buy, the broker will call down to the trading floor, place the order, and purchase the stock. Then you settle up. You pay the brokerage, not the actual seller of the stock, and the stock is yours.
The same is true for all kinds of brokers: diamond brokers, commodity brokers, insurance brokers, transportation brokers … all of these brokers will actually make the purchase for the client and the client will pay or reimburse the broker.
In the real estate industry, however, it’s quite different. When an agent is working with a buyer, for example, the agent will show the client homes for sale and when they find the right one, the buyer will actually make the purchase directly from the seller. The broker brings the buyer and seller together and doesn’t make the purchase for the client at all.
That brings me to another point. The homes we offer for sale - in other words, our inventory - isn’t really ours at all. Unlike a retail store that purchases products and actually owns them, our inventory is more or less on consignment and we’re hired to find buyers.
Another important difference is the way we relate to our competitors. For hundreds of years, real estate brokers have had a “cooperating broker” relationship, which means we share each other’s inventory through the multiple listing service (MLS). If an agent has a buyer looking for a certain type of home and their company doesn’t have it, but a competitor does, the agent can show the competitor’s property, sell it and get paid a co-op fee. No other industry that I know of works with their competitors like the real estate industry.
These differences all contribute to the unique community that is real estate brokerage.