Is there a chasm between real estate agents and trusted advisers?

The REB head coach and trainer and founder of Real Estate Gym began by looking at the common denominators between politicians and real estate agents and shared features of the professions that scored high on the ranking (fire services, nurses, ambulance services, pharmacists, general practitioners).

“There is obviously this thing about self-promotion and ego is something that is clearly distinct in one group and not distinct in another. You don’t see a nurse posting on Instagram, ‘hey, I actually served 30 patients today, give me a pat on the back’,” Mr Panos began.

In comparison, “we often see real estate agents saying, ‘hey, I’ve just sold my record month of properties. Here they are.’”

“I think things like that don’t help a situation; don’t help a situation in the perception of the industry,” he mused.

After Mr Panos pointed out real estate’s low barrier to entry as one of the “real big” problems in real estate, REB executive editor Phil Tarrant acknowledged that the low barrier to entry could be both considered as an inhibitor but also “something that enhances the profession”.

But the pair also noted that many professions – which are deemed more ethical – do require further education to carry out their roles.

And perhaps the epitome of ethical in a professional sense is the accountant.  

From Mr Tarrant’s perspective, “if you look at any professional-orientated industry, the accountant is the trusted advisor. To become an accountant, you can’t rock up, do a week’s course and you become an accountant.

“You’ve got to do a university degree, get you to a particular point, and then most good accountants do a ... [certification]. They’re a chartered accountant, or they’re part of the Institute of Professional Accountants – so you get this other designation around your professional excellence. That takes many, many years of both academic study and also practice.”

It led the executive editor to propose the question: “Are real estate agents advisors? Are they professional advisors? Can they become – or should they be considered – part of the same pool of professional advisors around accountants, lawyers, mortgage brokers, financial planners, et cetera?”

Mr Panos reflected back on his own education and how the differences between trusted advisers and salespersons had been highlighted: “I clearly remember some of the elements that were discussed was a salesperson wants to get the deal done; a trusted advisor wants to solve a problem for the client. A salesperson doesn’t care too much on who wins in this as long as they get paid. A trusted advisor will always recommend the interest of the client.

“The real big learning is, if you want to make the shift from a salesperson with commission breadth to the role of an advisor, you actually start thinking to yourself, ‘Let’s begin with the customer in mind. What do they want? Why don’t we make the customer the hero and not the agent the hero? Maybe that’s a good start.’”

Mr Panos is a firm believer that agents are in a good position to provide value as trusted advisers in the real estate sector, but he also acknowledges “there’s a fair bit of work that needs to be out in to change the perception of the industry”.

To that, Mr Tarrant acknowledged, “there’s a whole bunch of people who currently work within real estate that think professional standards should be increased. [That] there should be more rigour – more academic or vocational – in order to operate inside of real estate”.

“There’s advocates that says there should be better programs for the mentorship, the apprenticeship of agents, in order for them to put at the flag up to say they are a real estate advisor [or] real estate agent,” he outlined.

“Then there’s others that say, ‘It’s too onerous. It’s not fair. It’s impossible for people to obtain those professional qualifications. Let’s just leave it as it is.’”

Contemplating the topic, he went on to query whether or not the profession standards in real estate are adequate and appropriate for the real estate market of today and into the future.

According to Mr Panos, they aren’t.

He noted that financial planners, accountants, solicitors, optometrists and electricians alike all require a longer time to obtain a qualification than real estate agents do.

“The truth is there are people right now that are working at Roger David, working at Coles supermarket, that could be a real estate person ready for January.”

And while they could be working in real estate in January, the coach conceded, “they couldn’t be doing someone’s tax returns in January”.

“They couldn’t be actually representing someone in court in January. They couldn’t actually be going out there and drawing up architectural plans for a house in January.

“They are at a level that is not satisfactory, and that is why we’ve got this low barrier to entry. Anyone can do it, so we’re getting some good girl and guys coming to real estate, but we’re also getting some that probably shouldn’t be there,” he reflected.

Looping education levels back into the ethics debate – and noting federal politicians as the only profession to score lower than real estate agents, Mr Tarrant went on to highlight how there’s no real educational barrier to entry to enter politics.

“Well, there you go,” was Mr Panos’ response.

“Anyone could be the Prime Minister of the country,” Mr Tarrant concluded.

Listen to the full Real Estate Exposed episode with Tom Panos and Phil Tarrant here.