More thoughts on the value of agency, while 'tech' is on the rise for real estate.

update - july 28 2020

I felt it was a good time to dust this one off and re-post, because it’s always a good conversation to have regarding real estate agency. I want to add an update that i’ve been kicking around for a few weeks, though, regarding the practice of buyers using multiple agents, or just calling listing agents for showings of each individual property. Many of the leads I’ve encountered lately have been doing one or the other, or maybe both, and I strongly believe it causes frustration for each person involved in each action. For the seller agent, often they either can’t do dual agency, therefore if they get a showing request on their listing from an unrepresented buyer, they have to refrain from interacting with the buyers as they see the property, or they have to refer the showing to another agent. In the second case, this puts the buyer in a position in which there is - in my opinion - risk of preference to the sell side of the transaction, putting them in a weaker position to negotiate on all issues. If they had a trusted buyer agent, this is not a concern anymore. For the both agents, at some point they will realize they have just been used as free labor to show the house. Many people seem to not mind doing this, and services like Redfin and ByOwner, in recent years, have undermined the value of educated agents by making it seem like no big deal to call up any agent and have them show a property, even if you don’t intend to ever work with them again. For the buyer, lack of representation often means they will not be treated as a serious buyer, because not committing to an agent to represent them can be a red flag to seller agents that they are either not ready to buy or not financially qualified. The buyer that uses different agents all over town also ends up not getting the dedicated service they would get if their agent could trust them to commit to their professional expertise as much as the agent is committed to finding them the absolute best property that’s available. An agent that commits to a buyer isn’t just committed to finding the right property, however - they are committing to holding all the financial and family issues of their client in trust, protecting their legal and monetary investment, and doing everything possible to maintain a pleasant and professional escrow process. A couple of years ago I had a client for several months that finally admitted that they were using different agents in each different town, and she was only willing to work with me in certain places, and wouldn’t share with me what homes she was viewing in other towns. She also admitted that her husband was using a further set of agents, and then she wanted me to give architectural opinions on properties she was unwilling to use me as an agent on (on a side note, I explained in detail that I will not interfere with another agent’s transaction by giving architectural advice. I might have to say that I feel the house is unsound, or can’t be remodeled the way they want, etc, and if that kills the deal, I don’t want to be blamed for loss of commission). I finally had to stand up for myself and the other agents involved and explain to her why this was unfair to all of us, herself included. There was no trust left, for obvious reasons - I now knew that the hours I spent previewing homes and researching listings based on what she told me she wanted were happening while some other agent was working just as hard, none of us knowing what the other agents had been doing. If you are just beginning your search and aren’t ready to commit to an agent or haven’t met one you feel is a good fit, please be honest with those you do encounter, and thank them for their time, while being clear that you aren’t ready for them to spend additional valuable time on your search just yet. Once you DO find an agent that you feel you can trust, let them know that you are committed to them, and that you expect them to return the dedication in kind. This sort of open and honest communication is an excellent way to start a relationship that is focused on such an important transaction!

On a personal note, if you are looking to buy a home that will need work, why not consider working with someone that can shepherd you through the whole process? Property selection, purchase and escrow, renovation potential evaluation, design services, all working together…Seems like a good idea to me!

And now, back to the original post!

I’ll start by being honest: like a lot of agents, I got into real estate partially after experiencing a transaction and thinking, ‘uhhh….that was so easy, and that guy got paid HOW MUCH for it?? I can do this myself!!’ Almost 10 years later, though, I see that I was missing 90% of what happened in that transaction, because my agent did a good job. We had sold a house in November of 2006, for a price that probably still hasn’t been reached again, nearly 13 years later. Houses near it, that listed around the same time, have been on and off the market in the years since, never having sold. I know it was more than just dumb luck.

I have seen easy transactions, tough transactions, deals where the lawyers nearly killed the sale, deals where one party wanted to walk over less than $1000, and everything in between. Looking back at all of it, one thing is constant - agents hold things together and it’s our job to make sure that everyone walks away satisfied and confident. It’s possible that owner-owner sales can work, but for that to happen, human nature has to be on it’s absolute best behavior. Sellers have to be honest about all flaws, the market, their attachment, the condition, the warranties, everything. Buyers have to be savvy about inspections, risks, comp pricing, and legal commitments of sellers to buyers. Emotions and predjudices of all kinds need to be hidden and discounted on both sides. I’ll share a few examples I’ve been party to recently, to underline where agency can really help:

I had a closing the other day that involved a tricky trust and extended family situation, with multiple layers of lawyers on the seller side, and buyers that were buying for a family member, not themselves. On both sides, there was an inverted pyramid of voices and driving factors, all pointed at the closing as a goal. The agents become the focal point of that transaction, shepherding multiple parties toward the finish line, and making sure that the interests of every person with a voice are heard and that no one drops their responsibilities. This can be extremely challenging when emotions are high, and as an agent, we can remove our attachments to the parties easier, and be a filter that diffuses anger/confusion/resentment/attachment or whatever vibrates highest and puts reason at risk. Personally I really enjoy being that filter, and talking people down from the roller coaster of selling or buying the place in which lives happen. I know a home is * just * a financial transaction, but it’s also where we sing to babies at 3am, it’s where we are standing when we open a letter of college acceptance, or get the phone call we hoped would never come, it’s the sunny living room floor where a baby takes it’s first steps. I don’t think it’s unreasonable for sellers and buyers to get wrapped up in a lot of static around the transaction, and it’s satisfying to me to help talk them through it.

Another recent transaction I had involved a serious inspection issue. It wasn’t hidden from view or anything, but the solution to the issue was wrapped in city lot line disputes, river shoreline restrictions, flood guidelines, structural problems, and expensive repairs. There were times when both parties wanted to walk away, and I felt this was driven because the sheer length of the list of steps to resolve the issue was getting long and convoluted. The seller’s agent leveraged any and all connections she had locally to get approvals and cooperation from the city to assist and reassure the buyer, and on my side I was able to use my experience with construction and connections that I had to review the repair options and provide guidance there. After probably 100 emails, phone calls, and meetings, we have a seller that is living the dream on a lake in the south, and a buyer restoring a historic home and looking forward to fishing on their river. This sale was a rare find on both sides, and it would really have been a shame if it had fallen apart due to miscommunications or a lack of resources.

My last example for today involves my own home sale, which is listed by me. I know that’s a dicey proposition, being a realtor listing their own home, but after trying 2 other agents from very different ends of the business spectrum, and hearing from a cadre of local agents saying ‘you can sell it yourself! don’t hire someone else!’ I decided to just manage it myself. Part of my motivation was to use it as a learning tool, and I don't regret using my own home to learn lessons that benefit my future clients, so that’s ok. I think my husband and I are very clear on our own motivations and our numbers for the sale are pretty hard and fixed, and combine that with no actual NEED to sell - we can stay forever if we decide to, I guess. If a sale is a goal, though, it takes two to tango. We were approached by a young couple last fall that declared that they ‘never wanted to move to the suburbs, but our house was too cool not to consider.’ Odd way to introduce one’s self, but ok… They came out twice, and then said they were interested in planning an offer, and btw they don’t believe in using an agent, even though he has a friend that’s an agent and they could use him if they want. Eventually the offer came, but with caveats that included throwing shade on our location, their determination that we were over our zoning allowances (we aren’t, and all the houses and lots around here use the same zoning limits), and he then told us that we needed to concede our offer price significantly due to these ‘problems’. He is completely within his rights to not like the lots, or the house, or offer any price he wants, of course. BUT, by presenting himself in an arrogant, judgmental way, directly to the owner, he communicated a very negative point of view and killed any chance of negotiating with me. Had he been using an agent, he could have vented all he wanted to HIS AGENT, and then the agent could then have come to me and given me a softer, more polite, and perhaps even false narrative of why the offer was as low as it was. I might have even been sympathetic, and willing to negotiate. Their agent could have gotten them up a little, we might have come down a little, and right now they would be enjoying all this space for their growing family, and maybe we’d be in a little flip house while we wait for permits on our dream home. But, that’s the risk he chose to take.

These days, agents are bombarded with the arguments of ‘I can just use Zillow’ or ‘Why should I pay you to do this when I can do it for free?’, and I can very easily see why it’s tempting to want bargain services or no services at all. That 5% split commission is actual money, after all. Consider the other side of the coin, though - if you are a seller, do you perceive the difference that buyers see when they scroll past all those professional, staged, and well lit photos and see crooked, dark phone photos? What does that convey about your value? (yes, many agents use those photos, too - and it’s BAD.) Do sellers that show a home themselves sense that it makes buyers and agents feel uncomfortable to be watched as they walk through? As a seller that is letting people into their home, what security do you have regarding the names and information of people wandering amongst your belongings? And from the buyer’s side, a local agent can provide so much knowledge of the market, from flood patterns and which backyards swamp up in spring rains, to which schools are the most crowded, and which driveways the parishioners from the local church block when they park every weekend. Good buyer’s agents will also do their homework on multiple communities that might suit your search, because so often a narrow geographical focus might eliminate some properties that will fit the bill even better. If you are looking at auctions and bank sales, those can be even more tempting to avoid agents with, but the pitfalls, paperwork, and risks are so much more fraught than a conventional sale, that I would argue agency is even MORE important in those cases. In the end it’s of course a personal choice, but I feel compelled to share why I believe so strongly in something I once thought was sort-of unnecessary . Please do share your stories of how agency made a difference in your transactions!