Many of the questions buyers and sellers are told to ask when hiring an agent more or less are irrelevant. Experience, for example, doesn’t necessarily indicate knowledge. For every 10-year veteran of the Phoenix real estate market I can show you a relative newbie who has a better grasp on the nuances of the contract.
What someone charges, contrary to the opinion of many, also should be down on the list of questions asked. Knowledge in many cases comes at a premium, though that is a lesson usually learned after watching a transaction go south in the hands of someone unsure how to handle the basic challenges that arise.
Another suggested question is whether someone is a full-time or part-time real estate agent. Usually, the intent of this question is determining whether the agent is going to be available when needed to show a property, answer questions or just lend a sympathetic shoulder during the process.
Determining whether someone is part- or full-time is important, but not necessarily from the standpoint of access. It’s more a question of knowledge which, to my mind, ought to be the driving determinant when hiring an agent. In the vast majority of cases, a part-time agent does not have the time necessary to devote to expanding their knowledge of real estate.
Why do part-time agents exist? Because under the current real estate model, there is no disadvantage to having agents working only a portion of the time. There’s virtually no cost to carry – companies who charge and collect monthly desk fees are realizing nearly pure profit; companies that don’t charge desk fees but take a split of any transaction capitalize on the part-time agents’ infrequent closed transactions.
The only party disadvantaged in the process is the consumer. If buyers and sellers don’t ask the right question, or if they’re relying on assistance from their cousin who practices real estate when not teaching third grade, they are the ones who may not see their home sold or find the right property for them.
Further regulation isn’t the answer, however. Public education is. For all of the constant hand-wringing over low real-estate licensing standards, there’s little attention paid to the power the public has in eliminating unqualified agents from the business by voting with their wallets.
Most in the public assume agents are interchangeable. One’s as good as the next, so why not rely on that schoolteacher – especially if he’s willing to offer a rebate on the purchase or an extremely low commission. Don’t count on consumer protection groups to provide the message – they focus only on cost. Don’t look to the mass media – as 60 Minutes proved, they often can’t find the point with a flashlight and a compass.
We as real estate professionals can argue otherwise, here and in other forums, but the message often is lost as people claim there are just marketing tricks. But the argument must be made. Constantly. Not for our sake – many of us making the argument are going to remain in business regardless of the market share taken by the part-timers or the unknowledgable.
No, we make the argument for the sake of those entrusting one of their largest financial transactions in the hands of someone whose so-called training ended on the last day of real estate licensing, someone who has been let loose without the slightest idea what they’re doing. But they fake it well, and so they get hired. And then they and their clients have their lunch eaten by the agents who do know what they’re doing.
One question can make a huge difference. Ask it.
[tags]real estate negotiations, Phoenix real estate, real estate licensing[/tags]