Real Estate & Mortgage Insights
What makes an agent truly valuable?
Recently, an excited first-time homebuyer spent some time telling a real estate agent what she wanted in a home. They also discussed financing. Immediately afterwards, the agent took her new client out and showed her...
...two homes.
One was perfect.
Instead of making an offer right away, the buyer went home and called her friend. The friend had a real estate license. The buyer and her second agent presented an offer on the home, leaving the first agent totally in the dark.
After all, the first agent hadn't worked "too hard."
Which made me think about what really makes a real estate agent valuable, among other things.
Knowledge of inventory was near the top of the list.
It sounds boring and unexciting. Bookish, even.
You see, the reason the first agent knew which houses to show her potential client was because she had previewed those properties. That's one of those things agents do that you don't know about. They go out on their own, by themselves or with other agents, and look at property after property after property. They know what models are located where, how long they've been on the market, which ones have listing agents that are easy to work with, and more. They know all kinds of things that you don't know they know.
Not only that, the agent had been previewing properties for what "seems like forever" - so she immediately knew which houses to show the soon-to-be-excited buyer. She had been to those homes and/or model matches for those homes - for quite some time.
She knew her inventory.
The friend did not know the inventory. Otherwise, the buyer would have gone to her friend first, right?
It's like wandering around the aisles of a drug store not knowing which over-the-counter cough syrup is best for your particular ailment. Who would you rather ask? The clerk at the register or the pharmacist?
Either way, you're walking out of the store with a cardboard box filled with thick sloshy liquid.
So what you're really hiring in an agent is knowledge - and not just knowledge of inventory. Knowledge of lots of things that you don't even know you don't know. They make it seem easy, but that's because they want it to seem easy. If agents told you how hard it was, you would be even more nervous about shelling out hundreds of thousands of dollars.
After all, it is only the most expensive purchase you've ever made in your life.
But it's only a house, right?
And everyone knows that a Schedule 1 item on a termite report must be repaired prior to closing, which Schedule II items do not. And all those other little details.
By the way, the first agent and the listing agent talked to one another because she expected to present an offer shortly. No details, of course - just the name of her client and to expect the offer.
The buyer did present an offer, but with the wrong agent. This took the listing agent by surprise. Like many industries, real estate agents have a code of ethics they are supposed to obey. At the same time, agents don't always know what their clients are up to. Anyway, imagine how negotiations went, if they went anywhere at all. Plus, there were other problems that will be saved for another article.
Which isn't really the point. The point was that you hire an agent because of training, knowledge, experience, problem-solving ability, connections, their ability to communicate...and lots of other neat stuff.
The moral I promised?
You don't know what you don't know.
Which is why you hire people that will cover the blanks you know about, as well as the ones you don't. That is where you find the true value of a real estate agent.
� March 2004 by RealEstate ABC
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