Over several decades as a home owner, I have been following trends in real estate and comparing them in my mind to another industry that I have also been part of and have gotten to know quite well over the last several decades: the “translation industry”.
If you want to buy a house here in the United States, you basically have three options to choose from:
- If you know what you are doing, you can simply do it on your own, without a real estate agent. Although this option could save home buyers a lot of money, very few people do it this way, probably because the logistics and risks inherent in a transaction involving a great deal of money are simply too intimidating.
Very few people, around 1 percent of home sellers, choose this option.
- You can buy (or sell) your house through a cut-rate type of real estate agency called For Sale by Owner. Unlike most real estate agencies, For Sale by Owner charges a much lower flat fee of only a few thousand dollars that is independent of the sale price of the house, in exchange for providing limited support.
Although the logistics are basically taken care of, the homeowners have to sell the house on their own, without the assistance of a real estate agent. Relatively few people, less than 10 percent, decide to choose this option.
- You can sign up with a real estate agency providing the full range of services that real estate agencies offer, including the assistance of a sales agent who gets paid only if the house is sold.
However, the commission that you have to pay for this service is fairly substantial, between 5 and 6 percent of the price for which the house eventually sells. Since the average price of an average house in an average neighborhood (assuming there is such a thing) in Virginia is about 300,000 dollars, while in Northern Virginia it is about 500,000 dollars, homeowners have to pay a lot of money if they sign up with this kind of traditional real estate agency.
A few years ago, many real estate agents were fearful that it was only a matter of time before the internet would put them out of business, and this is precisely what the internet did to many other professions, such as travel agents and bank clerks.
The real estate industry was in a panic. All the information they used to rightfully (in their mind) own was now on the internet and anybody could access it.
When a new internet-based business model was created for selling real estate represented by firms such as Realtor.com, Trulia.com, Redfin.com, or Zillow.com, many in the industry expected that commissions would be slashed in an era when buyers suddenly had instant access to all the information that only real estate agents could access a decade or two decades before.
But it turned out that these fears were unwarranted – there are even more real estate agents now, who are finding, selling and buying houses for their clients than there were a decade ago, and the most common commission in the industry is still 6 percent of the sale price, half of which goes to the agent, and half of which goes to the real estate agency.
Prices on the real estate market collapsed in this country after the real estate bubble artificially created by our friends on Wall Street popped. Wall Street made out like the bandits they are from the crises they themselves created, in 2006 – 2008. But in most of the country, prices are now right back where they were around 2006 (which may or may not mean that another real estate bubble is about burst – I do wish I knew the answer to this question, but I don’t).
So one could say that the real estate industry, and real estate agents in particular, survived the boom and bust cycle typical of the industry, aggravated by the danger of threats to the industry from the internet, quite well.
Most buyers still prefer to pay tens of thousands of dollars for the privilege of being assisted by a helpful real estate agent who will hold their hand and whisper sweet nothings in their ears – such as the high prices of “comps” (similar houses) in the neighborhood and advice on how to stage the house for a sale, as I did on two occasions when I bought and sold my house.
The Sale by Owner method is just too scary for most people. The internet did not disrupt the traditional method of selling real estate – on the contrary, most real estate agents take advantage of the new capabilities that became available to them, using the internet for marketing purposes, such as creating virtual tours of houses for sale and tempting buyers to part with their hard-earned money.
If what you need is a translation rather than a house, there are also three main ways to go about it:
- A company can create its own in-house translation department and employ people called in-house translators, who receive a salary for translating. This is exactly what some companies, mostly large ones but also some smaller ones do, and I was employed for a while as an in-house translator, once in Czechoslovakia and once in Japan.
But relatively few companies do that – only those that need to translate large amounts of material, generally on a daily basis.
- A company or an individual can also contact one of hundreds or thousands of businesses, mainly translation agencies advertising translation services on the internet. Some companies create an in-house department staffed by people who are not translators themselves, but instead work as managers, multilingual and specialized managers of freelance translators. I used to work for a major manufacturer of chemicals as a freelance translator in this manner and from a New Year’s card which had pictures of all of the translators working for the company, including mine, I saw that the company worked with 94 freelance translators.
- A company or an individual can contact one of hundreds or thousands of individual translators who, theoretically, should also be findable on the internet, without the intermediary of a translation agency.
While the internet did not cause major changes to the real estate industry, it certainly changed the “translation industry” and from the viewpoint of individual translators, definitely not for the better.
Three are of course many important differences between these two industries, so many in fact that they are not directly comparable. But I also see some commonalities.
I see the real estate industry as a legitimate industry providing an important service in a much more honest manner than the “translation industry”. The “translation industry” does create important value, but only in the sense that it brings together somebody who needs something to have translated with a translator who can do the work.
Unlike in the “translation industry”, everything is out in the open in the real estate business. The clients have direct contact with the real estate agents, and because they know them more or less on a personal basis, they can rely on their instincts and intelligence to make a personal decision about whether they want to trust an agent who provides a direct, personal service.
The last time I worked with a real estate agent, she and her colleague offered to walk our three dogs when we did not have the time to do so and the dogs had to go. Both we and the dogs were very grateful for the offer.
Clients buying a house are also perfectly well aware of how much they are paying the agency and what the real estate agent’s cut will be, as well as the real estate agency’s profit. There are no secrets there.
While real estate agencies encourage their agents to advertise directly to potential clients, translation agencies specifically prohibit translators under the intimidating threat of hefty penalties or a lawsuit, from trying to contact direct clients (I just read on LinkedIn that a Czech translation agency is forcing translators to sign an NDA specifying that the penalty for breaking any of the clauses in the NDA is 20,000 Euros).
The fact that the “translation industry” is trying so hard to make sure that clients never come into contact with actual translators is an explicit admission that translation agencies realize perfectly well that if clients knew how to contact translators directly, many would prefer to do business directly with them because they understand that a translation agency generally does not create any additional value.
That is why so many translation agencies try to force translators to sign very long “Non-Disclosure Agreements” whose main purpose at this point is usually not maintaining the confidentiality of the client’s information, which used to be their original, legitimate purpose. Instead, NDAs now try to make sure that the translator cannot communicate about anything related to the translation agency (such as translation rates being paid to the translator, or how long it takes to pay) with other translators, and most importantly, that the translator will not dare compete for direct clients with the translation agency.
The “non-compete clause” is currently formulated in many contracts, which are called misleadingly “Non-Disclosure Agreements”, to prevent any possibility of a contact between a translator and a direct client because these contracts are clearly meant to prevent any potential competition on the part of translators, which is in fact an illegal request, at least based on antitrust laws here in the United States.
Translation clients have no idea how the payment is split between a translation agency and a translator; in fact, many probably never even consider the fact that the agency and the translator are not one and the same.
I wonder how it’s possible for translation clients to fall so easily for the other half-truths and misinformation frequently used on websites of translation agencies, how they can be taken by the transparent verbiage about three highly-experienced translators perfecting the translation, and complying with quality assurance standards. Quality assurance standards that are similar to industrial quality assurance standards applied for example to diapers and toilet paper (obviously, there can be no such standard applicable to “translation” – this is again a marketing trick). Marketing propaganda works wonders!
And the “translation industry’s” marketing propaganda does seem to work.
Real estate agents have been able to use changes brought about by the now nearly omnipresent availability of Wi-Fi to their advantage. Just about every real estate agent has a beautiful website that can be easily found by potential clients, and the rates paid by real estate agencies are still 6 percent of the sale price, at the same level where they were 20 years ago. But the rates that many freelance translators can expect to be paid by translation agencies has taken a serious nose dive.
Even without taking into account the effect of inflation, the rates that “the translation industry” is now paying to those translating for them are much lower than what they used to be 20 years ago.
I think much of the blame for why the results for those doing the actual work in the real estate industry and in the “translation industry” differ must fall squarely on the shoulders of translators themselves.
Many did not seem to realize early on, and still do not realize, that if they if they fail to make the internet serve them (by choosing a suitable domain name that will be found by search engines, and creating a professional-looking website that will induce direct clients to cut out the middleman and dump a translation agency), the translation industry will continue using the internet against translators and treating them as poorly paid, indentured servants.
Few home owners are interested in selling their homes without the assistance of an experienced real estate agent because there is so much work and a lot of risk involved in something like that.
On the other hand, many direct clients would be only too happy to cut out the middleman and work directly with the translator … if they could only find a suitable one on their own.
If you run a Google search to determine the current prices of houses in your neighborhood, Google will list on the first page not only large real estate agencies eager for your business, but also impressive websites of individual real estate agents who specialize in your regional market.
But if you run a Google search for a translation service specifying precisely your subject and language combination, almost invariably only translation agencies will be listed.
Relatively few translators are findable, on the internet or otherwise, as too many translators, even very good and highly experienced ones, continue to sell their skills and labor for the most part to the “translation industry”, regardless of how poorly they are paid and how much they are being abused by this industry.
I don’t know how to explain the differences between what is happening in the real estate industry and in the “translation industry”. But I do know that unless things change, translators will continue to be abused by the industry even more than they are now.