AGENT or ADVISOR?
Real Estate Agents suck. Wait, what? Did I really just say that?
It’s Tuesday night and I just received a call from a good friend of mine out of state who was fuming.
“These f’ing Realtors man, i’m sick of how many snake oil salesman are in your industry.”
What happened?
(Now I know nobody speaks like this, but i’m paraphrasing. Give me a break!)
“Guy sent me a lovely little list of properties that sold in the area, told me I was getting a great deal. We went into this deal with no contingencies, and now my appraisal came in $87,000 under what we’re in contract for. Where the hell am I going to get that money? Am I going to lose my deposit here?”
Happens all too often in this pull-your-damn-hair-out-because-Frank-the-Tank-”Venice’s#1REALTOR”-”200BILLIONSOLDLASTWEEK”-”TOP0.000001%OFREALTORS”-wants-his-commission-NOW industry. Also, I don’t know if there’s any Franks that sell Real Estate in Venice but I am most certainly not singling anyone out. (Glad I caught that in editing)
As buyers, we spend HOURS upon HOURS perusing Zillow finding our “dream” homes. $2,000,000 for THAT?!
By the time we’re finally ready to make the big jump, 85% of us will interview at maximum 2 agents before we pick one to spend the next few months entrusting. Entrusting with a decision that will alter the course of our lives, our financial security, and the future of our family. We spend more time trying out different Barbers / Hair Stylists!
Many buyers don’t realize just how influential a Realtor will be in their home purchasing process. Don’t just assume all Realtors do the same thing because they all “have access to the same MLS”. Finding you properties is easy. It’s what the Agent can do for you once you find it that is a measure of their worth.
So why do I have a vendetta against Real Estate Agents? Because many of them are just that - Agents. What you really want is a Real Estate Advisor.
A Real Estate Advisor is someone who is humble enough to look out for YOUR best interests irrespective of their own. A lot of the time that might mean helping you formulate a plan of action, give you the best path forward, and even refer you off to someone who’s more suited to the specific location/type of property you are looking for.
An Advisor wants what is best for you, not what is best for their 401k account.
Now before you say “well, who the heck would want to work for free?” - the most successful Realtors in the world recognize that Real Estate is a relationship driven business. If they advise you correctly, and earn your trust, they know the business will come in the form of referrals. Boom. There’s an honesty bomb I can drop on ya!
So how do you vet your Advisor to make sure they’re not a gasp - Agent? Here are 5 tips:
How much business have they done in the area you’re looking in?
This is easily found through a Google search, or a “recently sold” list on their Zillow page. Most agents boast about their sales on their websites as well. Find out whether they’re really an expert in the area. Most agents will tell you they sell “everywhere”. There’s no such thing as an agent who’s an expert in every single part of the city. Thousands and thousands of homes are sold each and every day, unless they’ve got Rain Man capabilities, they’re much stronger in their own backyards than they are someone else’s.
Tip: If they aren’t showing many sales in the areas you want to be in, this is a perfect opportunity to discover whether they are the Advisor or the Agent type. Ask them if that area is somewhere they work in extensively. An honest Advisor will tell you that it isn’t, and either refer to you to someone they trust in that area or tell you honestly that although it isn’t in their area of expertise, they are happy to do more research on the area and advise you better then.
Agent types will tell you they do a ton of business there and that you have nothing to worry about. Red flag, anyone?
Are they interviewing you to see if you’re a good fit, or are they rushing to get you to sign agreements?
Every, and I mean every successful Realtor has to portion out their time. Your agent should be choosing you as a client just as much as you’re choosing them. There are so many intricacies involved in a Real Estate transaction. As stressful as the transaction can be on the Seller or the Buyer, it can be equally if not more stressful for the Realtor.
Most agents are advised by coaches, managers, team leaders to get a “Buyer Broker” or “Listing” agreement signed as fast as they possibly can. This does protect them, yes, but it also binds you into working with them until that agreement is over. If they haven’t taken the time to make sure they are the best Advisor for your specific situation, they will not be accessible to you when easier deals come along.
Tip: Desperate Agents remain desperate when it comes to negotiating on your behalf or getting you to close deals that may not be right for you. Any Realtor that is patient enough to look out for your best interests will be willing to give you a little bit of time to interview other candidates or, perhaps, be willing to give you some references for you to call.
Take your time with this and ask them to be patient. An Advisor is organized and patient, but if they begin to feel pushy take that as you may. They may be working the same way when it comes to the patience needed to find you the right home, or to negotiate better terms for the sale of your home.
What is the total scope of service they provide?
Are you an investor looking to purchase a home to lease out? You’ll want an agent who understands the rental market and doesn’t just throw imaginary figures out there, causing you to purchase a home under the indication you can get more money on the rental side than what the reality proves. Does your agent have extensive background in the rental market? Do they have partners who can offer Property Management services?
Are you looking to put in some work to the property and add value? Do a remodel/renovations? You’ll want to see if the agent has experience in that field. Do they do their own remodels and have their own contacts? Do they understand the general pricing of the different scopes of work that each unique home may need?
Picking an agent who doesn’t have experience in dealing with your unique situation is a recipe for disaster.
Tip: Get very clear about the exact outcome you are looking for in your home purchase or sale (or both). Gather information from all Realtors you interview about the best way to go about with the sale/purchase of your home, how recent clients have experienced the current market, and find out how confident and knowledgeable the Realtor is about specific topics pertaining to your goals.
Once you are very clear on your goals, you can begin to notice whether that Realtor is truly understanding, addressing, providing expertise and listening to your needs or if they’re giving you practiced scripts in the form of answers.
How many listings/buyers do they currently have?
It is imperative to know how much of your Realtors TIME you are going to actually receive. Many of these hot-shot TV Agents or Agents who you see plastered all over the billboards in your community boast about the amount of business they close, or the large portfolio of homes they are currently listing.
They have the exact same amount of time in their day as anyone else. Many Agents go on tons of listing appointments / buyer appointments in an effort to bolster their portfolio. They see their business as a numbers game - get enough listings and buyers, a certain percentage will eventually sell/buy, and they get a larger share of the pie.
This is great for the Agent, but not necessarily in your best interests. You need an Advisor who is able to focus on selling your home/finding you the right opportunities. It’s not as simple as “list it and forget it”. These things take concentrated effort if you want top dollar on your home or the right deal on your purchase.
Tip: Find the Advisors who are honest and not boastful about their business. An Agent who spends the entire interview talking about how large their team is and the amount of business they close every month is the same Agent who won’t be answering your phone calls as soon as the agreement is signed. You’ll be handed off to another Junior Agent who doesn’t share nearly the same amount of expertise or knowledge.
Real Advisors will focus on your specific home, your specific needs, and will take the time to find out what you really are looking for out of your professional relationship. It doesn’t matter if they have 50 listings or 50 buyers, that doesn’t have anything to do with the sale of your specific home or your specific search for a home. Find the Advisor that asks you questions, not boasts about their business.
Find out whether the Realtor practices what they preach
I know this sounds obvious, but you would be shocked to find how many homeowners entrust Agents who don’t own investment properties of their own to find them the right opportunities. How many Agents who rent their personal residence preach to their clients that “now is the perfect time to stop paying rent and build equity on your own home”.
There is real value in finding an Advisor who practices what they preach. What do I mean by this?
Find the Agent who invests in the types of properties you like to invest in. There are certain things you learn by being an investor / homeowner / Short Term Rental manager that cannot be taught by being only apart of the Purchasing/Selling process.
Until I began to invest in investment properties, I had no idea how much involvement it truly takes. Everybody hears about the amazing returns on AirBnB’s, but nobody tells them about the ugly side of considerable damage to their homes if they don’t have the proper processes in place, or the down months in their market where they have no bookings. That can only be advised to you by somebody who has gone through it themselves.
Tip: Ask your Realtor whether they have personal experience in achieving what you are trying to achieve. Are you looking to furnish a home and put it on AirBnB? Do they or have they ever ran an AirBnB of their own? Do they know of or work personally with any AirBnB managers?
Have they done any renovations of their own? What is their personal Investment strategy when it comes to the long term Real Estate market and how do they personally leverage their equity?
Any Agent that tries to shy away from these questions isn’t comfortable enough to truly advise you.
If you’ve made it this far in this blog post, i’m proud of you. You truly care about making sure you are hiring the right Advisor for you. I hope these tips do help you make better decisions off the bat before signing any agreement with any Realtor. Keep in mind, just because a Realtor helped your friend or family member out and they had glowing reviews, it doesn’t mean they are the best fit for your specific needs.