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.
Sound
farfetched?
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.
