"The SECRET" ......to working efficiently with Buyers Part 4 What to look for in an agent

"The SECRET" .......to working efficiently with Buyers.  Part 3 What to look for in an agent.
By Greg Perry, Kirkland Realtor, Kirkland WA

Part 3, Disover Buyer desires and needs.
Part 2, Helping Buyers understand the market
Overview:  "The SECRET" ....to working efficiently with Buyers.

In this section I share an overview of "what to look for in an agent".  The Buyer really needs to understand that their real estate purchase is their largest lifestyle and financial decision.  Their choice not only affect them now, but far into the future.  I don't dwell here long, however, I cover each category and hit the issues head on.  Here is the basic outline and my approach:

FULL TIME VS. PART TIME 
Here's the question I ask my client, "Would you believe that a full 80% of all real estate agents are part time?"  Of course, I just introduced information to them that they did not know.  Only 20% or less of all real agents have the "bread winner's mentality" when it comes to the real estate business.  The industry is flooded with agents who hold jobs and hang a license and hope to make a sale or two each year for extra money.  The industry also attracts well connected spouses who take advantage of referral connections generated from their partner.  The agent should have a reasonable production level, closing 1-2 transactions a month at a minimum.  Only then will they have a reasonable understanding of the market, the nuances of negotiation and develop the critical relationships needed to be effective with other agents.  I tell them the most important criteria in my opinion is to work with a full time agent.

TRANSACTIONAL VS. RELATIONAL
Transactional vs. Relational represents more of a style of the way an agent works.  Assuming now both agents are full time, a transactional agent is very number oriented and views his activities and clients as numbers.  Transactional agents can be very good inside the confines of the transaction, but once they receive their commission check, that is likely the last you see or hear from him.  Relational agents (like I am) not only do a great job within the transaction, but stay in touch to develop repeat and referral business.  Here's what I tell them, "Because I am so active in the market place, I'm constantly coming across the best service providers.  So, if you find you need a painter, a contractor, gardener or even a tax accountant, give me a call and I'll refer you to the best.  I want to become your "trusted advisor"."

AFFILIATED WITH A REPUTABLE COMPANY -- ARE THE A REALTOR?
There are many real estate companies to choose from.  I work for Windermere in Kirkland, Washington.  It's important to note that I do not run down competing real estate company to my clients. I relate my point from my personal story in researching the real estate company that I chose to hang my license with.  My story goes something like this:  "As I was researching which company to affiliate with, I interviewed with several local real estate companies.  In my research, I discovered that for the Eastside of King County, Windermere owned approximately one third of the the market share.  Further research revealed that the #2 and #3 companies combined had another one third of the real estate market.  When I added this up, I was amazed that the three market leading companies combined to control two thirds of the total market share.  I wanted to understand why, and what I discovered is that these 3 companies work hard to promote a good image in the community, and had the best training and development programs.  I decided to go with the market leader, Windermere and have been extremely happy with my decision."

I do share with them that there are local companies that allow hundreds of part time agents to hang their license for a very nominal fee (never actually naming company names), and that agents who are affiliated with them are, by and large, inadequately trained.  I also point out there our small regional "boutique" companies that do a very good job with clients.  My goals is to raise the opinion of my company without negatively blasting the other companies.  In fact, I represent my main competition in a very positive light, raising them as an industry leaders, which in fact they are. 

I also chat about the value of being a Realtor, subscribing to industry standards and the Realtor's code of ethics.

DEMONSTRATES GOOD CHARACTER AND COMPETENCE IN INITIAL MEETINGS
What a client is looking for is someone to trust.  I actually teach them the two components that create a trust relationship with service providers.  The two components are Character and Competence.  When we find someone who we feel has outstanding character, and really knows what they are doing (Competence), we want to do business with that kind of person.

ASK FOR A REFERRAL
Most of my Buyers are referred to me.  For those who aren't, I supply them with testimonials and a client list so they can call for references.

FULL SERVICE AGENTS VS LIMITED SERVICE AGENTS (Discount).I have learned to always refer to the discounter brokerages as "limited service brokerages/agents" and not discount agents. Here's the fact: clients always get less service for less money!  This is an important point!  Discounts are always talked about in the terms of "saving commissions".  Often limited service means not making or capitalizing on other money or term issues in a contract that can actually cost a client more in the long run.

Typically there are two ways one can earn a discount when purchasing a home.  The first  is to do business with a Limited Service Broker.  I share openly at this point that, not only do I not have a problem with limited service brokers, I feel they are good for our industry as they provide consumer choice.  Heck, even the retail world has Wal-Mart and Nordstrom.  It's all up to the consumer and their comfort and savvy.

The other way to receive a discount is from a full service agent that offers a discount.  Here's the question that I ask, "Why would a full service agent offer to you a discount in commission to entice you to work with them?"  Almost without fail, they respond, "They must need the sale", or, "They must need the money."  This may be the most dangerous of all agents for a Buyer!  I share with the client that agents work on commission.  The agent needs food and has a monthly bill cycle.  Desperation can set in, and the agent will offer discounts just to get clients.  This agent may need the sale to close more than the client needs it to close, and is in the position to steer the client in a way that may not be in the client's best interest, particularly in the initial price negotiation and during the inspection. And besides, if they can't negotiate for their own income, how are they going to do defending your issues in the contract?  Think about this!

Again, I try to be completely open and transparent about our industry and the different business models in the most positive way possible.  I'm the toughest on part time agents and the "full service agent" that discounts. I believe in the consumer's right to choose.  By being a good educator, it's my hope they'll choose me!

Next up:  What is the Buyer's expectations of their agent?

Comments

[Joe Zapata]

Great Article, very good information for sellers as well as agents. Great content and very valid points that I will try to use in the future. Thanks.

Joe