Your Major Business Decision
Recently we helped a family sell their home and “buy up” into a larger, more expensive home. Like most transactions these days, the purchase was smooth. The agent that brought a buyer to our listing was a professional. They understood the business and led their client through the transaction.
On the flip side, it was more challenging.
Once we found the right home at the right price, we acted quickly. One quick ‘red flag’ was that the agent appeared new. When making an offer, I research everything I can, including the agent with whom I may be working. (Poor representation can be a deal killer!) So we pull up the agents license number (often times an indicator of their experience) and their sales in the MLS, then I have a conversation with the agent.
In this case, the agent had a license number from 2016. The MLS showed three sales and no other listings, and in this case, another ‘indicator’ is that the agent was related to the seller. I called, and in conversation, the agent came off like they had other things they’d rather be doing. With most experienced or strong agents, that’s not the case.
The transaction eventually closed, but throughout the entire process, the sellers and their agent were in reaction mode about everything. At closing we got a call from the agent asking us to reduce our fee because the seller “just found out” their proceeds from the sale weren’t enough to cover all the expenses. This should always be front and center during pricing and negotiations. The inspection discovered a lot of items that are normally discovered during the agents initial walk through of the property. To top things off, right after the ink was dry on our deal, a similar home nearby went on the market for almost $25,000 more and sold immediately. When it was all over, I really felt bad for the sellers.
The choice of representation should never be taken lightly. Often times home seller’s select their listing agents with non-business related factors. Things like family ‘obligation’, loyalty to a friend, or to help a new agent start their career. Most likely not the same criteria they would use for a heart surgeon!
The act of “giving” a listing to someone, rather than making a business decision stems from the general public being misinformed about the real estate industry on many different levels.
Successful agents know how many homes they sell per year, what it takes to sell homes, and what they do to sell homes. Selling lots of homes matters, because in real estate, really knowing how to sell homes comes from the experience of doing it lots of times in succession, not from classes, being in a busy office, or being in the business a long time.
In almost every company, the Realtor is not an employee, but is a free agent contractor. Each Realtor is its own business. Each Realtor has their own standards on things like getting an education, how many homes it sells, how much money is spent on marketing, how hard they work and how they go about marketing a home. Because much of the general population is unaware of this, they often times view all Realtors as being essentially the same, and doing the same things to sell homes. This couldn’t be further from the truth. To help people understand our business, we developed a list of things we do to market and sell homes. We talk about it whenever we meet with a seller. When people read our reviews, the unspoken truth is that we have 6-10 people working full time each week with the common goal of finding a buyer for our listings, and finding homes for our buyers. Inactive agents or part time agents working other jobs that just so happen to have a real estate license couldn’t compete.
One time we had a client that didn’t like the news we delivered, so in response, they went to their local Schnucks store and spoke to a cashier that happened to have a real estate license to see if what we were saying was true! Comparing a real estate team that spent hundreds of hours per week in real estate with someone pushing groceries over a scanner!
We know human nature, and understand when people want to ‘give’ us business. In our case, we feel we can back up anyone’s decision based on our hard work, determination and experience. In selling a home, or buying, the important key is to remember that it is a business decision. Make it accordingly!