Just as walking through a kitchen doesn’t make someone a chef, an agent living in a neighborhood doesn’t make them a neighborhood expert. The information age is firmly ensconced in the real estate world, long gone are the days when agents were the gate keepers of the data. The days of MLS books printed quarterly and carried around like bags of gold, only to be viewed by those with “access” are a bad memory. For the most part, the public has as much or more information available for use as Joe Agent. And that is a very good thing.
The real estate industry excels at public relations; was there ever a time when any real estate organization – now or in the past – didn’t trumpet that “it’s a great time to buy”? Even during the crash and years of bottom scraping, that shrill message remained. The “recovering” market of the last year has launched new ads, rallying calls and of course, brought back “local” agents that represent themselves as “neighborhood experts”. All of which is nonsense, because…..see the first sentence.
Expert is defined as: a person who has a comprehensive and authoritative knowledge of or skill in a particular area. Experts have a prolonged or intense experience through practice and education in a particular field. Using this definition it’s reasonable to assume that an “expert” agent would have many years of experience and a fairly comprehensive body of work. Every definition of “expert” focuses on a skill, not “as long as they live and work in Anytown, USA”. Experience and knowledge seem to play a larger role than where someone lives. So what does “Neighborhood Agent” tell home sellers and home buyers?
“I live here and know this community cold…my kids went to that school…homes here sell so fast…they’re building a new mall in the area that will make this area even more desirable…we’re recovered and back on the increase…”.
- Can any agent or anyone collect demographic data on the community?
- Can any agent or anyone collect school data on the community?
- Has anyone, anywhere been able to guarantee anything when it comes to development? How did that work during the boom? With guaranteed appreciation?
- Recovered? Real estate works at the local level and the last many years have demonstrated national “opinions” are meaningless at the local level.
“This is a very unique area, you need local expertise”.
- Perhaps, but is “neighborhood agent” that expert? Why? No other agent can put the home in the MLS?
- What’s unique about the area? What impact will it have on the big picture?
- Is “neighborhood agent” so focused that they don’t have a larger perspective? Competing areas and how they impact the process?
- What about potential appraisal issues? If “unique” is taken literally, does “neighborhood agent” understand the appraisal process? Are they the only ones to speak about it?
I have sold homes in this community for years”.
- How many and how recently?
- Full time or opportunity agent?
- References? Source of business? Overall volume? Reputation in the industry?
- Competing markets? Will the seller or buyer miss other opportunities due to a myopic “neighborhood agent” view? Will the home seller have unrealistic expectations planted?
“I have buyers just waiting for homes to buy right here”.
- Sure the “neighborhood expert” does, because listings that don’t require agents to move around much are always welcome.
- A variation of the “we need homes” nonsense is basic marketing and something that’s drilled into every agent’s head. The objective is to get a sign in the yard.
- Is it reasonable to assume that when the home hits the MLS that all buyers in that and similar neighborhoods will be interested?
“This area/house/lot is worth…..because I KNOW this market. This is perhaps the single most damaging sentence “neighborhood expert” will say”.
- Agents “know” nothing, the market knows everything. The buyers are the market and they talk – “neighborhood expert” may not want to listen.
- Without recent data suitable for use in an appraisal, this is highly irresponsible to say but routinely done.
- This approach – opinion before data – is especially common with custom homes and second homes. “Neighborhood agent” won’t hesitate to manipulate or dismiss data that doesn’t fit their opinion.
- Living in an area doesn’t make an agent an expert any more than walking through a kitchen makes one a chef. Experience trumps everything, real estate transparency demonstrates that.
A rather common scenario:
- “Neighborhood agent” wants to remain noticed in their circles, takes a listing and prices it to please the owner and others in the circle.
- Offers continue to come in below list but accurate according to the data.
- “Neighborhood agent” becomes indignant with the agents presenting offers, continues to ignore data in favor of their opinion. Continues to respond with “yeah but and owner has $X into it…”
- Home languishes, eventually either expiring or selling where the market dictates.
- “Neighborhood agent” assigns blame using something like “…the buyers just don’t recognize the value…the market this and that…” convinces the client that they are not at fault.
- “Neighborhood agent” didn’t accept a “low ball” and can continue to solicit business and say that they “know the real value” of the community.
To be clear, agents shouldn’t work outside of areas that they have experience in. Areas like Atlanta, Boston, Los Angeles, New York…span geographical large areas. An experienced and full time agent – with solid real estate data – can effectively research trends and advise clients across these areas. There are clear assumptions of course:
- That agents will self-regulate in terms of time, distance and skill. Assistance will be solicited if required or the file will be referred if needed.
- That adequate and appropriate data exists to formulate sound opinions.
- That recommendations to the client are based on data, not baseless opinions.
- That the client understands the data and the opinions of the agent.
- That the client is aware of the agent’s credentials and is satisfied with them.
Transparency is very much alive in the current real estate environment, home buyers and sellers have the ability to access every bit as much information as any agent does. The proper application of that information is the key; walking into a full stocked kitchen does not make a chef. Having data is important, applying it properly to the situation is the key to real estate success. The single most important aspect of a successful real estate transaction begins with the client ensuring that a qualified, experienced real estate agent is selected. In the meantime, the more the public demands of the real estate industry the better things will be.