What Makes a Good Real Estate Agent?
Real Estate Agents are a dime a dozen. Literally. They are on discount. They are dropping commissions across the board to win listings. Then, once they get the agreement signed, they have a tough time getting the best result or at least making the client feel like they did. There are major companies being financed to attempt to swallow up the home buying and selling market based solely on how much (or how little) they are charging. As margins for agent services become increasingly razor-thin, we’re seeing a trend in which agents don’t really care about clients - because they increasingly deal in volume. Thus, who is really winning in this situation?
Today’s tech-driven home sellers are looking to pay discounted prices for convenience. As a result, they’re getting shoddier services and poorer results. It makes sense that the marketplace is trying to find the easiest way to complete real estate transactions. However, it’s the agent’s responsibility to empower buyers and sellers to make decisions that are in their best interests, thus ensuring the best results. In essence, it’s their job to make transactions easy. Since this incentive is increasingly disappearing, the quality is beginning to slip from transactions, and all parties involved are suffering in their own way. This begs the question: given the amount of value and responsibility offered by an agent, why is the average consumer looking for the cheapest option?
Ultimately, not all agents are created equal. Some are good and some are bad. 99% of the time, however, the cheapest option does not produce the best result. Thus, sellers are duped into thinking that the commission they pay an agent hurts their bottom line. In reality, if sellers paid more for a better agent who could get them more money, they’d actually make more money in the long run.
So, what makes a good agent?
Resources
Attitude
Insight
Strategy
Experience
See what I did there? Agents need to RAISE the bar, not just show every home they walk into on Instagram.
They need resources. They need to have contractors, inspectors, lenders, escrow companies, handymen, architects, landscapers, junk hauling services, storage and moving companies, other agents, etc. in their phone to provide any necessary resource to a client at a moment’s notice.
They need the right attitude. It’s not just a positive attitude, it's the right attitude in the right situations. Moving in or out of a home is stressful. Having an agent with the right attitude who can be fun, assertive when necessary, on your side, and see the job through - this will improve the whole experience.
They need insight. They need to be actively involved with the market on a daily basis. They should be writing offers for buyers or reviewing offers with sellers consistently and discussing with team members in their office to understand how the market is moving. The agent should understand a neighborhoods' amenities and schools. The classic “neighborhood expert” is becoming obsolete, however, due to this type of information becoming increasingly available online. As such, a good agent needs to simply do their homework on any areas they’re unfamiliar with, to get a good sense of the local market and amenities.
They need strategy. Whether buying or selling, when you choose an agent, they should be able to work with your situation and develop an effective strategy. Typically, the best strategies come from experience and trial and error. This includes marketing strategies, which is less about spamming a neighborhood with flyers, and more about delivering trusted knowledge to an audience.
They need Experience. The average agent across the country does 11 deals a year. In California, there are even fewer deals than this. If they’re not hitting this minimum benchmark, you should probably talk to another agent. Years of experience doesn’t mean much either, it's more about the number of transactions on both the buying and selling side that may be similar to your situation/needs.
The average agent’s salary in California is $85k/year according to indeed.com. In November of 2019 housingwire reported that the average price of a home in California was $605k. So with 2.5% commission on a 600k home, an agent takes 15k, most of which split anywhere between 10-50% of that with their brokerage. At roughly $10,000/transaction, the average agent does less than 9 transactions per year. Yikes! That $85k is untaxed when paid out so let’s call take home pay around $60k on average.
Let’s be honest, in California, 60k/year doesn’t get you very far. Think about other jobs that pay $60k/year: probably not the most coveted positions. Thus, as a society, we look to these people who make 60k a year and expect them to handle the most valuable transactions of our lives? No wonder people want to do away with real estate agents!
That is, unless they’re the best agents. With a good agent on your side, you’ll end up in a win-win situation and benefit in the long run.
If you’re in the market in 2020, feel free to utilize our Homeonwer’s & Preferred Buyer’s program to leverage not only the best agents in the field but also the most efficient and streamlined process to buy & sell.