It is cliche to begin a post with a definition, but I am going to do so anyway.
Miriam Webster’s online dictionary defines the word ‘success’ in three basic ways, the second of which is the focus of this post – the correct or desired result of an attempt. Creating the optimal outcome for client should always be the goal, but in far too many cases, it is not.
Qualitative or Quantitative
Somewhere along the line, we (Realtors) began to collectively measure our success as agents by quantitative metrics…not qualitative ones. Client satisfaction is hard to measure but sales volume is easy and thus, it became the measure of success and the basis of our individual promotions. Many of the sales gurus in the real estate industry preach deal count as the primary way to measure how successful an agent has become. Prospect religiously and focus on price reductions and the sheer number of leads will trump the necessity of creating satisfied clients.
It is the incorrect way to position ourselves.
Bragging is not Marketing
Spend a few minutes exploring any website or periodical where Realtors advertise and what do you see?
- You see the agents and their brokerages bragging about how much they have sold.
- You see the sales leaders of the month and gross sales volume.
- You see agents constantly branding themselves as ‘experts’ in an area or neighborhood.
- And what else do you see? You the agent’s picture as large, if not larger, than the homes they sell. It looks as much like a high school yearbook as it does a place to find a home.
This is unfortunate as it sends a signal that sales volume is how an agent should be judged, and not market knowledge or skill sets. It also sends the message that the agent is more important the property that is being marketed.
Now, some of the agents responsible for the ads really do have some level of expertise over and above the market norm. When you begin to look for properties in areas with historic protection overlays, restrictive zoning, high growth, rapid gentrification or properties which may require advanced knowledge of the financing market (jumbo pricing, condos, adaptive re-use, multi-family), expertise is a benefit. Typically, the agents with specific knowledge are able to demonstrate this expertise via an appropriate work history, references, blogging or other outlets allowing the client to realistically vet the agent and their skill set(s). Far to few clients spend enough time choosing the correct agent and instead, work with the first one they meet (and the NAR statistics back this up.)
A Good Agent is an Advisor
To me, when someone hires a Realtor, what they SHOULD be hiring is an advisor.
While part of a Realtor’s compensation is dedicated to activities (driving comes to mind as well as opening lock boxes and printing out listings), it is the knowledge and experience component of the process which is most integral to the success (or failure) of a transaction. And this is where the definition of ‘success’ comes into play…the definition of a successful transaction is simple – does the client fully understand the decision they are making? If the answer is ‘YES,’ then a successful transaction has occurred. If the answer is ‘NO,’ then a word other than ‘successful’ must be used to define the transaction.
In order to understand the decision being made, a client must understand the factors which drive the particular market. Using Metro Richmond stats to guide a decision in Glen Allen is not appropriate. Using comparable sales from early 2016 to drive a pricing strategy in late 2016 is also a poor decision. And of course, understanding the impact of financing on your particular home type is also critical, as this will have one of the most fundamental and far-reaching governmental impacts on the real estate industry in our lifetimes.
Comfort and Understanding Equal Success
When it comes time to put the signatures on not only the contract, but the inspection report, disclosures and the loan docs, do you feel comfortable? You should. When the appraisal comes back above (or below) the contract price, how does that impact strategy? When the seller refuses to make any repairs, should you accept it? How do you protect yourself against financing risk in a non-warrantable condo project? A client should be acutely aware of all of the risks associated with each purchase and fully understand the value of the property being transacted. When those two factors are understood, the best decisions are made.
Ultimately, the selection of the correct agent for the task you seek to complete will increase the likelihood that the outcome is successful. Expecting that any agent can handle any task, and that ‘real estate is just real estate’ is a poor assumption to make. Success occurs when decisions are made by informed clients with full understanding of the factors at play.
If you feel anything less than confident when the pressure is highest, you are not being served.
About the Writer // Rick Jarvis, is one of the founding partners of the One South Realty Group and began his real estate career in the early 1990’s. He is a life long Richmond native and can be found online at Google+ and Twitter.