This post is probably going to ruffle some feathers, but I think it’s worth putting out there. I showed some restraint in posting it, however, because I actually wrote this in the fall of 2013 but held on to it for a few months so as to protect the identities of those (most recently) involved.
There’s a conspiracy going on in real estate right now. It’s the “Conspiracy of the Competent”.
What does that mean?
It means that, all things being equal, agents who do deals prefer to do deals with agents who do deals.
In a hot market, sellers have far more leverage than they have had in many years. In a cold market, buyers get to set the rules of engagement. In any market environment, the leverage shifts from one side to the other based on whose side the numbers are favoring.
Right now, if you’re selling a home, the name of the game isn’t simply “getting an offer”. It’s getting the RIGHT offer, from the RIGHT buyer, with the RIGHT agent, with the RIGHT terms.
If you understand what this market is, it’s not farfetched at all.
One of the classic mistakes lower-producing agents make is that they fall in love with any deal, because they think that being under contract is all that matters.
Well, that’s like saying it doesn’t matter who you get engaged to, as long as you are engaged.
As the father of two daughters, I can tell you that kind of thinking is preposterous!
It completely matters who you contract with, because for the next 45 days, you’re going to be in an intense relationship that is almost certain to have dips, turns and drama at some point. If both sides are committed to the interests of their clients, it’s almost inevitable.
So why would you knowingly contract with an agent who sells five homes a year when you could find someone successfully selling 20 or 30?
Now it’s true, there are a handful of really good agents out there (perhaps semi-retired) who only sell a few homes a year by choice. And there are some "high producing" agents who you would be well-advised to stay away from. That’s why I get on the phone and ask questions.
I also do my diligence to figure out who the buyers are. How did the agent meet them? Past client? Referral? Blind call from a bus bench ad? It matters.
Then we talk about the lender. If it’s Quicken Loans or the Bank of Zimbabwe, you might want to pass. I strongly prefer lenders who are locally-based and who have established relationships with their real estate agents, because again, teamwork and solving problems is at the core of making it to closing in one piece.
Three years ago, I didn’t vet things so invasively. That’s because three years ago, you weren’t going to get multiple offers. Buyers were scarce and sellers were plentiful. That meant buyers got to call the shots, and sellers who wanted to sell had to deal with a very thin buyer pool. And that meant sometimes you simply needed to contract with people who might cause more problems than they solve.
Of course, every situation is unique and sometimes I do choose to work with agents who don’t sell a lot of homes. Maybe they have an incredibly well-qualified buyer, with bank statements submitted to back up a large down payment. Maybe they are new to the business but are working under an accomplished and well-respected agent. Or maybe, on occasion, every now and then you simply have no choice but to contract with someone who doesn’t sell a lot of homes. Those are often the deals that hasten ongoing hair loss and these stupid crows’ feet next to my eyes.
But all things being equal, I’m drawn to competence and proven results.
If you’re working with your hairdresser or your cousin who just got his real estate license, you might not want to hear this. But good agents prefer to work with good agents.