Selecting a real estate agent is quite unlike choosing a professional in most other businesses. The encouragement of “part time” agents muddies the selection process and since almost everyone knows at least one agent, when it’s time to choose representation a simple process can quickly become convoluted. The age old question of “is it what you know or who you know” is probably more applicable to real estate than any other business.
In what other “profession” are relationships considered as important as industry experience? In what other profession can a part time job or even an “opportunity” job be represented as a full time career? In what other profession will clients be seemingly unconcerned with performance but vigorously pursue someone that will discount fees or provide a “rebate”? Despite the catastrophic housing collapse, the “who you know” seems to be every bit as valued as the “what you know” by many involved in real estate transactions.
This is a sales business; a successful agent brings buyers and sellers together. The public expects smooth transactions; if they can be completed in 30 minutes on TV then certainly things should take but a couple of days in the “real world” However, inside every transaction are multiple, small milestones on the critical path to success. If they fail to be met so does the larger objective; and with that come problems. Those tasks are like starting a car and driving to the store; getting there is the objective, everything else is unimportant…until it’s not. An experienced mechanic, like an experienced agent, anticipates and avoids potential issues and keeps things moving.
Many say it’s not good to do business with friends. Discussing money, credit, home values, personal decorating and the like can be awkward. Some clients prefer to maintain privacy and not share everything with friends; some agents are slow to deliverer bad news to people considered friends. Some clients expect a discount from friends that are agents; some agents may wrestle with this and consider the “half a loaf” idea, give in to get business. Client–agent lines may blur, tension develop if things don’t work out as expected; neither party may want to do business but may feel compelled to…the variables are many.
The real estate industry experienced a seismic shift after the boom; it has become much more complex and in a sense, combative. Sellers are often facing a major loss; many bring money to the table. Buyers find mortgage qualification can be incredibly stressful. Agents are finding reduced inventory, appraisal challenges and unprecedented market swings. The changes are continuous, what used to be a static environment is now exceptionally fluid and multilevel; making a successful transaction look boring is no longer easy. What hasn’t changed is the public perception of agents, in large part because it remains an industry with a very low entrance bar and even lower performance bar; pay the dues, complete continuing education and keep the license active. Introducing this environment into a friendship can produce significant stress.
Given that a real estate transaction is a major financial event in anyone’s life, one would expect some thought and research would be given to selecting a real estate agent. Despite the importance of this, data and surveys repeatedly show that the vast majority of clients speak with just one agent. Fewer still actually verify what they are told by the agent in terms of experience and production. Obviously there’s no hard data to indicate how many friendships have been impacted by real estate transactions gone wrong, but Google the saying “never do business with your friends” and see that there is no shortage of recently added posts.