What Makes a Good Real Estate Agent Great?

I've spent several hours over the past few days talking to past Pearce clients about their real estate buying or selling experiences.  It was so useful, and so gratifying, that I've decided that I need to do it on a regular basis!  I asked each of them to tell me what qualities s/he found most important in the agent used in a particular transaction, and which services offered were most appreciated.  And here are the results:

1.  Overwhelmingly, the number one factor that made agents great was communication.  Clients were happiest when agents kept in touch regularly, yet this simple fact was not taken for granted, as many agents don't do that.  People I contacted told me over and over again that it was really important to their selling or buying process that they be kept informed, and that their agents were excellent at living up to this need.  It was mentioned so often that it should be the first thing buyers and sellers ask about in an interview.  However, the fact that you ask about it and someone says that they will communicate often, does not guarantee that s/he will.  Tip for clients:  Make your expectations clear upfront.  Tip for agents:  Don't prejudge what a client will want to hear.  Tell him/her everything.

2.  The second point that arose again and again was that great agents control the process.  They serve as backups for clients, who may be buying or selling from far away, who may never have bought or sold a property before, and who almost always have a lot going in, in addition to the transaction in question.  Many people mentioned that their agents kept track of dates and deadlines, always reminding them not to drop the ball or let an important clause lapse.  Great agents anticipate the next need, and regularly remind clients to stay ahead of the curve.

3.  Great agents are knowledgeable about local customs.  They can explain mill rates and closing practices.  They can talk about differences from town to town.  They serve as sources for questions and research help.

4.  It was surprising how many people mentioned that their agents went above and beyond.  We don't always know that clients recognize what is part of the job, and what qualifies as doing "extra".  I heard of an agent getting the mail, checking the property often, taking care of repairs that needed to be done before the closing, and other tasks big and small.  It was gratifying to know that clients do appreciate that such service is more than the basic representation.

5.  Flexibility was a key trait mentioned.  Buying and selling are activities often done outside of the regular working day, and clients were impressed that agents rolled with the punches.  Also, great agents accepted that needs ebb and flow, and that sometimes searches would get back burnered, while at other times people were ready to move quickly.

What did they not tell me?  I was a little surprised that they didn't mention help with pricing or offers, or advice on choosing among properties.  That doesn't necessarily mean that clients don't look to agents for actual real estate advice, but it does seem to indicate that all the points above are what made the difference.  That suggests that there could be less emphasis on how long an agent has been in business, and more on service.  One seller used a questionnaire to choose an agent, and got pushback from those who didn't want to answer questions formally.  From everything I heard, great agents have no reason not to make promises upfront, because they really deliver down the line!  In fact, I should close by quoting one client:  "She really became a friend".  That's right, everybody.  While you are buying or selling, you may talk to your agent more than anyone else in your life, for that period of time.  Choose someone you like!

Be Open to Listening to Your Realtor

We all know that lots of people don't listen very well.  It's also true that sometimes others talk about things without knowing much about the subject.  And sometimes, you may know more about something than the person who is trying to educate you.  However, most of the time when you hire an expert, you do so because you are interested in what they have to say about their field of expertise.  Part of why you have engaged them is so that you can benefit from their knowledge, even if all you are doing is confirming your own hypotheses.

As Realtors, our job is to give people the best advice and information we have about how to sell or buy a property.  What we tell others comes from experience, from "inside" information from within our companies or our industry, and from the collective wisdom of those in our firms and contacts.  It may not always be correct, but it usually has some data points behind it, and it is gathered and disseminated with the best of intentions.  Often it is more up to date than what is available through public records, or even appraisal firms.

Therefore, it's always surprising to us that people who come to us for help then ignore advice, or even argue with us.  I've been working in real estate for a long time, and the following have all been said to me within the fairly recent past:
"I'm going to tell you what we should do, that I heard from a person next to me on a plane yesterday, but I don't have time to listen to your answer";
"You might learn something about your field from me";
"Do you have anything to say that is worth my listening to?  I'm busy doing something else right now." (This from a person who picked the time of the call).
"I hear you, but I'm depending upon the statue of St. Joseph that I buried in my backyard". (This house did sell.)
And the most common:  "This isn't what happens in Austin/Boston/Charlotte/Denver...." or "I've done this before, and you need to ask more and leave room to bargain" or "offer less, and leave room to bargain".

You get the idea. One of our key tasks is to listen closely to your wants and needs, so we aren't asking you to do anything we shouldn't also be doing ourselves. We don't claim that we are infallible or that we have all the answers, but it's usually worth listening to your Realtor, and being sure that you heard what he/she said, and not what you wanted to hear, before you decide that you know better.  We do have recent market data and statistics, lots of experience, and are clearly vested in the success of the transaction, since that's how we get paid.  The final decision is always yours, but it's best to make it with the most professional input at your disposal.

A Generational Shift is Coming

We've long known that the real estate industry is aging, with the average salesperson now in his or her late 50s.  What we also know now is that the recent, long-lasting recession caused an entire cohort of people either to leave the business, or not get into it in the first place.  That leaves us, like architecture and other fields with cyclical demand and incomes, without the next generation ready to step up and lead, or, in this case, even to sell.

That's important to some extent simply because we currently have experienced real estate agents having to adjust to new technology, new laws, new ways of selling, and buyers who are often the age of their children.  While many are up to the task, or even more than up to it, there is a void left for buyers who wish to work with agents who look like themselves.  For instance, there is a shortage of supply among agents who have school-age children.  Also, our industry is less diverse--sometimes much less diverse---than the population we serve.  That is, in part, because the world is becoming more diverse as younger people intermarry, while older groups are often less likely to have done so.  Even our social customs have evolved, with younger groups less inclined to plan ahead, making it more challenging to plan showings and appointments.

What will the future bring?  What we are starting to see now is a much younger demographic entering the sales force, for several reasons.  First of all, there are very few barriers to entry.  You need a license, and some training, and you're good to go.  For kids having trouble cracking an anemic job market, real estate is an increasingly popular choice.  Secondly, it takes some time and some money to get going, since you live from commission to commission, and they don't happen right away.  So many boomers are now supporting their 20-something children, for recessional reasons and others, that they may as well support them to enter real estate, as pay their rent so that they can be an underpaid intern somewhere.  And, unlike that intern, they may be able to become self-supporting without changing jobs, as their skills and contacts increase.  As a parent, you can directly influence your child's income, by sending your friends and coworkers to him or her as clients!  Thirdly, real estate is a low-risk way to be in your own business.  It doesn't take much capital, unless you are the broker, but you are running your own small firm.  That appeals to millennials, especially since it doesn't require being at a desk at all, certainly not on specific days and at specific hours. It uses skills that are second nature to digital natives.  Even going to a party counts as networking, so there are opportunities to sell everywhere and at any time.  Finally, the real estate industry is ripe for change, for growth, and for the advent of a new generation.  In the midst of an entrepreneurial boom, real estate is front and center--everybody lives somewhere!

Back to School, Back to Work

I've been out of school for a very long time now, and I don't even have kids in school anymore.  Still, to me Labor Day seems like the beginning of the year, every time it rolls around.  And I don't think I'm alone, because we can certainly notice it here in the office.  One agent just said to me that he'd been spinning his wheels all of August, waiting for people to get back to work and also to their real estate issues.  This year, even the weather made us want to get out of the swimming pool and back to our desks.

What does that mean for sellers and buyers?  There is a noticeable uptick in the market from Labor Day through Halloween, and it's a window you should use to your advantage.  If you trying to sell, this is when you need to get real about the price, the condition, and the cost of waiting versus selling now.  If you are buying, you may find more product out there to choose from, and you may find it easier to make a deal, particularly if you are buying for cash.  Whichever camp you're in, don't let the season pass you by.  Get out there and let the cooler weather spur you on to action!

Where are the Young Real Estate Agents?

We spent a good deal of the morning brainstorming about recruiting.  Nationally, and for us, the average real estate agent is in his/her late 50s.  Since the market is now being driven by first-time homebuyers, and since they are mostly in their 20s and 30s, there is a disconnect between professionals and  clients.  Most of the agents are digital immigrants, and might have kids the same age as the buyers, so it would certainly be good to develop a pool of younger agents.  Younger buyers, and sellers, have vastly different expectations about technology, about time, about how to shop for anything, and about risk.

When we thought about recruiting agents to match this profile, we realized that there are many aspects of a real estate career that would appeal to Gen Xers and Millenials.  Unlike the Greatest Generation, they aren't expecting one steady career for a lifetime, so the ups and downs of a commission-based agent wouldn't necessarily trouble them.  Unlike older workers, they aren't tied to an office or a standard work day--they could start at noon if they were serving sellers and buyers who shared their hours!  They wouldn't be limited to two weeks of vacation every year, and their dress code would be flexible.  In all those ways, it's a perfect career for a younger person.  And, if their parents have to support them in this job market, as they graduate and look for work, why not enter a field where hiring--and potential--are unlimited?

Playing the Odds

We were doing some research this week, and were startled to discover that, from January 2010 through the present date, only one-third of all listings taken have sold.  That means that, for every seller who put his or her home on the market and sold it, two sellers put their homes on and nothing happened.  If you add those people who haven't bothered to list their properties due to the poor selling climate, there is a big supply out there. 

Since real estate agents work solely on commission, this is obviously a troubling state of affairs.  We only get paid one out of every three times we list a home, and listing always used to be the guaranteed way to make money, since the percentage of buyers who look and don't buy is higher than that of sellers who don't sell.  The combination is deadly.

 It does prove, however, that sellers should be listening to their agents about the price and improvements necessary to attract an offer in today's market.  What's the point of cleaning everything up and making plans to move, only to sit there for two years without a sale?  If you do want to sell, you need to do more than just sign a listing--you actually need to have a property in the top third of all properties, in order to sell it.  That's food for thought.

Still a Divided Market

The real estate market is more complicated than it would appear from reading the papers. There are things that are selling, and selling quickly. There are other properties that are hanging around, some without even being shown. This has been true for a while now, but it's not what people expect in a so-called "buyer's market" (read "bad real estate market").

In more traditional renditions of a buyer's market, there are not enough buyers, and so they can bid low on properties, and sellers will have to take low offers if they want to sell. It tends to be true across all segments of the market, from starter homes to mansions. In a seller's market, the opposite occurs: People who want to get a property need to move quickly and bid high, or they will lose to other, more motivated buyers.

This market has aspects of both. Many people have listed their properties a long time ago, and those places have been sitting around. They are often overlooked by agents and buyers, as they can be considered as tired, and usually as overpriced. Other places come on, attract attention right away, and sell quickly, sometimes with multiple offers. What's the difference? Sometimes it's location, or staging, or size. Sometimes there's just a buyer who needs what a seller is selling, and needs it right away. More often, however, it's perceived value. The market--that amorphous body of economic value judgment--rates the property as a good value, and that sparks interest.

All of this makes it difficult to price properties. However, the possibility of multiple bids and early interest means that it's hard to underprice in today's market, as buyers will bid the price up to where it can/should be. It's easy, unfortunately, to overprice. Many sellers look at what's on the market at the time, and place their home in the range that they feel it belongs, without distinguishing between the overpriced inventory and the value properties that are getting all the interest. And that's a big mistake. Look at what's sold, and do it with a clear eye. Then listen to your real estate agent, and get your property into the sold column. Then you can become a buyer, and use all that knowledge to get a great value!

Leading RE

We belong, as many independent real estate firms do, to a network of similar professionals. In our case, it's call Leading RE. When its member firms combine their sales, Leading RE outsells any of the national networks, and its reach extends around the globe. I just spent some time on the website, and the tools available to us far exceed what could be obtained in the pre-web days.

What's the advantage to consumers? For one thing, we can refer people from New Haven to anywhere around the world, and ensure that they receive service at a high level. It's the difference between walking in the door of any professional establishment and having the name of a good person at the other end of the phone. Also, it allows us to coordinate the services on both ends of a move. We can use trusted colleagues in another location, and count on them to keep us informed about what's happening with the purchase or sale in their area. Sometimes that involves bridge loans or changes in moving dates, and it helps to have everyone in the loop.

These things are helpful for agents as well, obviously, but it is their ability to take advantage of the accumulated knowledge base of others in the field that is most useful. Sometimes you just need to avoid reinventing the wheel! In fact, we belong to a much smaller group of large independents, The Leadership Council, about which I've written before. We just started a joint site to post training, advertising, marketing, and various documents which would be interesting for the group to see.

It took a very long time to get our very fractionalized industry to the point where it could share more than basic rules of conduct in common. But it's been worth the wait!