The changing world of choosing an agent
Originally appeared in Bay Area News Group publications on August 1, 2010
According to an online real estate article, the Houston Association of Realtors (HAR), with 23,000 members, recently “pulled the plug” on a web-based application that allowed consumers to view which agents had the greatest number of listings and/or transactions in a given neighborhood or Zip code. This happened shortly after it was introduced because HAR was overwhelmed by angry communications from its members.
Reading this, you may be thinking that the mediocre or weak agents were trying to prevent progress. Why else would there be such an outcry over a new system designed to provide useful information to the public?
After over 30 years in the business, I understand what is behind the uproar and it gives me an opportunity to revisit this topic.
Buyers/sellers repeat same mistakes
One consequence of the human condition is that, over a long period of time, people can be observed repeatedly making the same, fundamental mistakes. For whatever reason, they have failed to learn from those who have been there, done that.
When it comes to working with an agent, one of the biggest, and much too common, blunders is choosing based predominantly on personality and/or appearance, rather than on the capability and willingness to do what is best for the client.
Another major miscalculation is the assumption that those who do a lot of business, overall or in a specific area, are the best ones. In some cases this may be true; in others, it is not. Many agents who did mega-business in the recent boom years are not even doing real estate today.
If you conduct an online search, you will find links to “Finding superstar real estate agents,” and similar headings. This is where many buyers and sellers can go astray. Sales volume is only one of a long list of considerations when deciding on your real estate representative.
Representing vs. selling
Few buyers and sellers know what representation means and why it should be important to them, yet this is the number one duty an agent owes to his/her buyer or seller. The agent’s key function is to stand in the client’s shoes and represent his best interests. Not knowing this and/or assuming all licensees do it has lead to bitter disappointment for hordes of buyers and sellers over the years.
Experience
An agent’s number of years in the business is relevant if that time was spent learning the skills needed to do a top-notch job on the client’s behalf. It is particularly useful in changing markets. Experience comes into play because it provides a perspective in which to compare today’s market to what happened in the past. This allows for an educated deduction on how your decision regarding the amount to pay or sell for will look in the future. If you understand how critical this can be, you are likely to be more discerning before committing to a particular Realtor.
Criteria to consider
Some other areas in which your agent needs to be proficient are communicating, marketing, pricing, negotiating, contract clauses and content, local market information, attention to detail, legal requirements, including disclosures, problem avoidance, handling and interpreting inspection reports and working out lender difficulties. Further, he must care enough to use this knowledge and experience to help you get the result you want, not to simply make another sale.
Agent evaluations online
It is now possible to find a number of third-party sites that provide client evaluations of real estate people. This can be helpful, but has serious drawbacks that are difficult to determine. One is that most or all of the positive comments might have been prompted by the agent, rather than posted spontaneously by the client. Many may be from the agent’s friends or relatives.
The other issue is that some use the Net as an online forum for negativity. Once online, these rants can be difficult, if not impossible, to remove. I have seen horrible, unfair complaints made, usually without fully disclosing the writer, against individuals and companies I know are excellent and extremely reputable.
There are also sites that place customer comments about the house next to Multiple Listing Service (MLS) information for active listings. As above, this can be unwarranted and very destructive.
Final Thoughts
One reason for the protest by HAR members may have been that comparing agents’ sales production is not, and should not be, a function of the MLS. As someone who has been involved with the MLS for most of my career, I support that point of view.
Multiple Listing Services were set up as listing data exchanges to facilitate sales between real estate licensee members of that service. They were not created, and many feel should not be used, to compare agents.
Some highly successful Realtors are skilled at making sales as well as doing what is best for their clients. Assuming, however, that a top producer, or any agent whose name you found online, will care more about your best interests than getting another commission could be a huge misstep. I believe this point was a major factor behind the outrage of HAR members to the use of their MLS data in this way.
It is sad but true that, in their hectic, fast-paced lives, many people feel they don’t have the time to evaluate the differences between agents and, instead, rely on short-cuts like picking the one with high sales volume. This gamble may or may not work out well for them.
Related Articles:
Understanding Agency
Real Estate Is Like Politics