Consumers of Residential Real Estate: Buyers Beware & Sellers are Clueless

For years the phrase “buyer beware” is a good mantra to heed. In fact, home and condo buyers today have access to lots of information that helps them make good decisions. One of the best decisions buyers can make is to work with an experienced buyer’s agent. Give home buyers a thumbs up for getting better at home purchasing process.

And now for you sellers, at least those of you who hire and contract licensed real estate agents and brokers to list and sell your home. You’re clueless. I am the first to admit and even advocate that the best chance to sell a home is by using a Realtor. So why am I slapping sellers in the chops?

Because sellers have no real understanding about the qualities of the Realtor who is going to list their home. Really, what criteria do sellers use when selecting a competent listing agent? What kind of clothes they wear, what country club they belong to, the resemblance of a distant relative? Bear in mind that 80% of all consumers who hire a real estate broker do so after speaking to only one agent. Eight out of ten.

Sellers have no real understanding when it comes to differentiating between listing agents.

But here is a fact: Sellers have the best chance to sell their home by using the top producing listing agents who work specific areas.  Sellers may see real estate signs, have friends who “know” other realtors, or just have one who lives across the street, but how does a seller know who is a good listing agent or a bad one? They simply don’t.  They are clueless. Questions like where they sell, how much they sell, how they market, what’s the average DOM? (days on market), what’s their average list to sales price? – these important questions are often left out of a seller’s dialogue.

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Home owners have their best chance to sell a home when using the top producing listing agents in the specific home area.

True story below.

Last year some friends of mine moved out of state. They had heard of the consulting concept, but brushed it off because they had befriended a Tucker agent who went to the same church. They felt comfortable with this agent and I guess it was the biblical setting that reassured them. (Part of the 80%, at this point).

Ok, I begged them to let me provide the agent statistics for their tony neighborhood in Carmel. I got my foot in the door when I offered to provide stats for the Tucker agent they felt so good about. After all, the consulting service is free, and the seller gets an advocate to help them during the entire pre-listing period. Sellers should beware that the motive of any listing agent is a contract signature.

I showed up in Carmel a few days later at their house with fresh agent data, including the sales production of the Tucker agent who sat next to them in church. I walked inside, greeted them then handed the stat page to the wife (who is a practicing attorney). Five seconds is all it took her to X-nay the Tucker agent. Yes, the nice one from church. Why? Sorry, but nice won’t cut it: the facts were that she had not sold any residential homes in the county where the sellers resided. What?  Plus, the last 6 months the agent had only 4 sales with two of them being commercial. “She’s out.” The wife said after looking at the recent production.

Then we sat down and I showed them the top listing agents in their area and price range and we compared agent to agent until we narrowed it down to three top agents. Yes, the seller has to listen to three extremely qualified listing agents who are proven sellers in this very area. After three good (and separate) interviews, sellers have a very good idea about their home value and what it will take to sell it.

After three separate interviews (no listing contract signed yet) sellers are no longer clueless. They are educated. For free.

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Choosing the right doctor, I mean, real estate agent?

A man went in to have some foot surgery. His doctor was trustworthy, honest and professional. Two years later the same man needed brain surgery and insisted that his podiatrist do it because he trusted him so much. Of course, most of you would tell that guy to have a brain surgeon do the operation. We all know why.

Which brings me to this great analogy in real estate. A man, Mr. Buyer, bought a home and was represented by Realtor Bob. Bob did a great job representing Mr. Buyer. In fact, some years later, Mr. Buyer needed to move. And his automatic reaction was to call Realtor Bob. But Mr. Buyer is making the same mistake the guy in the first paragraph made. How could this be?

clay Make sure you hire the right agent, or it might be a long walk home.

As many of us know, the training for a foot surgeon and brain surgeon is very different. They are specialists in medicine. In real estate, real estate agents have only two jobs – representing buyers and sellers. But the skill set necessary to do either job is about as different as being a podiatrist or a brain surgeon.

So when Mr. Buyer bought his home, Realtor Bob functioned as a buyers agent. And years later, Mr. Buyer calls Realtor Bob to sell his home to work in the capacity of a listing agent. Does Mr. Buyer know anything about the different skills needed from an agent when they are acting as a listing agent? Probably not. Should he be concerned using an agent who may or may not have the skills to effectively market a home for sale? Well, he doesn’t have a clue. How would he know?

Too often, consumers wanting to buy or sell a home will choose an agent, based on trust. Trust has nothing to competence yet consumers make choices without getting any factual information. You don’t have to be a brain surgeon to figure this out. Of course, most Realtors don’t want you to know whether they are competent in both areas. But there are ways to find out.