A Costly Real Estate Myth
In my career as a listing agent, I have helped hundreds of home owners sell their properties. As many as I have helped, you could double easily that number to reflect the number of home owners I have met with that believe a real estate myth that is costing them dearly. What’s the myth? No matter who they hire to sell their home, their outcome will be the same. There is a thought that hiring a real estate agent is simply a path to getting the property into public view and the offer(s) the seller gets will be the same no matter what agent they hire. This is flawed logic.
Real estate, like many fields, is one in which the skill of every individual in it varies. That skill is the background from which agent will advise a seller. Do you think an agent that considers their job a hobby, or source of fun spending money and gets much less experience in the actual practice of real estate is going to have the same skill level as an agent that helps dozens of sellers each year and runs a full-time real estate business? Of course not! Yet many sellers fall into the trap of making a hiring decision on who will be their sole advocate in cashing out their largest financial investment based on that assumption. How does that happen?
When sellers investigate the process of selling, they are faced with the fact that different agents charge varying commissions. And commissions paid to their listing agent come directly out of their net proceeds. So immediately sellers believe that hiring a less expensive agent means they will make more money. For those of us who regularly see the results of poor hiring decisions in real estate play out in the market, the old adage comes to mind, “You get what you pay for.”
Step outside of the real estate world for a moment and consider a general manager for a professional sports team that has a hiring decision and wants to get the best result-getting to a championship level. Do they think the player that has been mainly warming the bench and stepping in when someone is injured is going to have the same skill as the player that plays every game, puts points on the board consistently and is a household name? No way! They are both professional athletes, but they are at different skill levels. You don’t need to be the GM of a sport to know that a higher skill level is worth the higher cost. If you want the championship, you need practiced and well honed skill.
Of course, sports teams get a chance every year to make another run at being the best. A home sale is a one shot opportunity to make the most money at the best terms. What is another field in which you have one chance to get it right? Hiring an attorney. Choosing a surgeon. Hiring based on the fees is not even a consideration for those decisions. Why? You need the best outcome because something very important rests on it.
What if you had a chance to make $1,000,000 if you made a free throw in a nationally televised basketball game? You could hire out the job and only have to pay the substitute player if they made the shot. Would you hire the top tier professional player for $500,000 or your buddy who practices in his back yard when he feels like it, but watches TONS of basketball for $100,000? This hiring decision to most is pretty cut and dried. You have way higher odds of making $500,000 if you hire the top tier pro and long-shot odds of making $900,000 if you hire your buddy. The outcome is based solely on the skill of who you hire. That is how listing agents should be hired.
So how can a would-be seller focus on who is best for the job and have the highest probability of bringing the most desired outcome? Experience is a big one. How many homes does the agent sell in a typical year? Do they have experience in your region? How quickly do their listings go under contract? Too much time on the market is money lost in any market. Buyers and their agents will wonder what is wrong with a home that takes too long to sell vs. the average marketing time. In other words, if your home is on the market for a month when the average marketing time is seven days, the odds of getting your list price are slim. This is a tough one for sellers to understand who have not navigated intense buyer demand markets before, also known as seller’s markets. Selling in a buyer’s market average marketing time may be sixty to ninety days. Hard to imagine those days in 2024 or any of the last several years. The comparison is always relative to the market in which you are selling.
Another area to focus attention is how each agent markets their listings. Do they believe in professional photography? If an agent isn’t hiring a professional photographer, is the buyer enthusiasm really going to be there for your listing? What about staging? Do they offer staging advice? Are they willing to do staging themselves or hire it out? Have you looked through their previous listings? The top agents in any market know how to present a home in the best light. Even the order of their listing photographs make sense. They aren’t thrown online with no regard to the order. We’ve all seen the listings that take you from the front door entry to the basement level, to the master bedroom, to the exterior, to the kitchen, to the living room and then the basement only to then go back to the kitchen. If a task as simple as the order of photographs doesn’t matter, what does?
When I present the listings of my seller-clients, every detail matters. Where a trash can is placed on photo day to the order of the photographs to create an easy to follow home tour are key to a great first impression for buyers. Getting out accurate information to buyer agents so that writing an offer is easy and seller’s desired terms are met is key in setting expectations for buyers and their agents.
Knowing the terms of the contract and how they typically play out in a transaction is a HUGE part of my skill set. I liken it to pulling up to a four way stop and knowing at least half the drivers at the same stop have no regard for the actual protocol that is taught in basic driver’s ed. A driver with years of experience on the road will know before they pull up to the stop which driver is going for the rolling stop or claiming their out of sequence turn. It is in the thousands of previous stop sign encounters and all the conscious and subconscious real life clues your brain has registered. I know well before my sellers have chosen an offer which is the most likely buyer to get to settlement as the contract is written. I know the agents that successfully represent buyers and they ones that have likely set an unreasonable expectation. I know the lenders that can make the settlement date and the ones that have missed them in my career. And I know the points in the transaction where I need to pay particularly close attention to ensure things go as planned per contract.
Just like any other field, a higher skill level is never the cheapest. And just like any other field, the highest skill level is what ensures the best outcome. When sellers focus on the fact that there will be only one advocate in their corner as they cash in their largest investment, knowing their outcome is tied to the decisions they make based on the advice they get, they will seek the best advice from the most skilled agents. Then, and only then, can they guarantee themselves the absolute best outcome possible. The fee is secondary to that because highly skilled agents will pay for themselves and easily bring more in the bottom line ultimately realized and a transaction that meets expectations.
Real estate agents are not equal because they passed a test and hold a license. I can hold a basketball, it doesn’t make me a professional basketball player. I can also hold a camera. It doesn’t make me a professional photographer. Skill is something gained from experience. It may terrify you to know that newly licensed real estate agents are not required to do any type of apprenticeship or mentoring. Following the lead of an experienced agent is one hundred percent voluntary. The state requires certain courses be taken periodically to stay knowledgeable of changes in the industry and the basics, but anything beyond that, throughout the course of an agent’s career, is voluntary. That is is why skill levels among listing agents vary so widely. When it is time to sell, your relative success is based on the agent’s skill, not the commission they charge. Every seller gets the results they deserve based on their choice of listing agent. If you want the best result, hire the best agent for the job.
Chris Ann Cleland
Associate Broker
VA License #0225089470
Long & Foster Real Estate
Call or Text: 703-402-0037
Email: ChrisAnn@LNF.com
www.UncompromisingValues.com
The opinions expressed in this blog are those of Chris Ann Cleland, not Long & Foster. All content is written by Chris Ann Cleland without the aid of artificial intelligence.