Hiring a real estate agent is, for many consumers, a major project that involves more than just picking the first person they meet at an open house. The decision to hire an agent is rarely taken lightly. Consumers take a variety of paths to choosing an agent from interviews to referrals. I'm writing this to the consumers who may be considering who they hire. There's more to consider than just the obvious classic criteria and I'll tell you why.
The traditional criteria used to evaluate agent worthiness are a mix of easily quantifiable data points derived from years of work and sales. The common criteria are:
- Years in the industry
- Overall and recent unit sales
- Overall and recent dollar sales
A Different Look At Years In The Industry
As a consumer, the first classic criteria - years in the business - seems like a good one because you think hiring a new agent would be a mistake. Perhaps, but consider that a new agent with an MBA probably knows more about business, finance, and negotiation than an agent with 20 years experience who handles no details in their transactions. The point is that your choice of agent, when considering experience, is better to focus on the necessary skills for the job.
The necessary skills are many but the biggest ones are data analysis (understanding the sales data), contract law (knowing and interpreting contract terms), negotiation tactics, marketing (in general), and customer service. When you interview an agent, ask them questions that give insight into each of these areas. You'll find that when they can provide specific details showcasing their expertise in these areas, the years in the industry won't matter.
The Overall Unit And Dollar Sales Gimmick
Regardless of the market you're in, there is probably at least one agent who claims to be "#1" because of how many homes they've sold or the total dollars sold over their careers. It's a gimmick for the most part. As a consumer, you've been led to believe that an agent that sells 200 homes a year must be good by default. How else would so many people list their properties with them? Well, there's more to it than that.
It is entirely possible that an agent (more likely a team) selling hundreds of homes not only sells them all but does so with excellent customer satisfaction. Unfortunately, there are also many agents with large scale sales numbers who did so through sales of government or bank owned properties. Other means of inflating sales figures include:
- Heavily discounting commissions (buying listings)
- Reduced services
- Naturally high-volume markets
- Dominant advertising
While these may all be perfectly legitimate means of obtaining business, they belie the one criteria you care about - quality. Take a close look at the sales price to list price ratio and the overall days on market. Even those have the potential for manipulation but they could indicate how well a buyer's agent gets a discount or a listing agent gets top dollar. Beyond either of those numbers, you'll want a more objective measure of quality: references.
Most agents will have some number of references and don't bother with the ratings you see on various websites. Get something that was written by the consumer themselves such as a copy of the letter or email they sent the agent. A good reference combined with quality metrics should give you insight into how well the agent performs.
Criteria Beyond Statistics
No matter what the numbers, references, recommendations or other data points tell you the agent you choose has to be someone you like. Get to know them a bit and make sure they're someone you can work with. While this is a business decision and a business transaction, having a good working relationship will be important. Keep that in mind as you make your choice.
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Bryan Robertson, CEO | T: 650.799.9951 | Email: email@example.com | Website: http://www.BryanRobertsonHomes.com |CA BRE# 01191946 | Catarra Real Estate, Inc | 171 Main St #220 | Los Altos, CA 94022