Posts Tagged ‘Realtors’
Wednesday, September 20th, 2017
Flat fee brokerages have been around for a long time, and recently there have been a few additions to the real estate flat fee brokerage world. For those who do not know about these companies, they attract home sellers by promising to list homes for a set fee that is lower than what the average real estate agent will charge for the same work. This sounds great right? Many sellers agree and sign listing agreements excitedly, without considering the facts.
Here are some reasons to truly investigate flat fee brokerages prior to signing on the dotted line:
1.Service. There are new flat fee brokerages out there that promise to provide the same great service as traditional agents who charge more commission to do the same work. Make sure you understand what you are getting for the price you pay.
Flat fee agents tend to have a LOT of listings. I know from much personal experience that one listing alone requires a lot of my attention and availability. Personally servicing multiple listings will jeopardize service.
Also keep in mind that flat fee agents do not get paid much per listing – they make up for that in volume. Will that lead to lack of attention to your listing? You need to figure that out.
2. Paperwork. Many flat fee brokerages charge such low fees because they do not actually handle paperwork or showings. There are those who promise full service, but MAKE SURE you get an explanation of exactly what that means – if you have it in writing and the agent cannot deliver you should be able to fire him or her (see number 3).
3. Check the contract thoroughly. Many flat fee brokerages have clauses in their contracts that sellers may not understand, such as agreements to purchase replacement property only with the brokerage (remember, flat fee brokers make more money from buyer sales than from listings since they get paid full commissions for those), to only use affiliated mortgage companies, or to forfeit money if you cancel the contract. Be careful and make sure you fully understand what you are signing. It is also very important to make sure that you can fire your agent/brokerage if you are not satisfied – at any time – without being penalized or trapped in a contract. If you need help deciphering these contracts, seek legal counsel.
4. Check the brokerage client satisfaction history. It is always important to check testimonials and stories from clients who have used the services of any broker. Spend time researching not only the broker’s own site and third party sites (like Zillow or Yelp), but also check news stories online. You may be surprised at some of the negative press you find on the brokerage.
5. Legalities. Keep in mind that selling a home is a legal transaction – if you do not have someone to guide you it could be dangerous. In order to avoid being sued it is always a smart idea to work with a real estate agent who can help you with paperwork and deadlines, as there are many of both in every real estate transaction. Not to mention, brokerages have insurance to protect against many issues that may arise, IF they were representing you. Flat fee brokerages that just list your home on the MLS and have you do all the work may set up situations that are ripe for breaches of contract and non-disclosure issues, among others. Make sure you have someone guiding through the sales process, or hire an attorney to look over all your paperwork.
There are some new flat fee brokerages out there that are trying to change the way the flat fee business is handled by promising stellar service. This is a great intention, but if you are a seller make sure that you understand the contract you sign, as well as your rights. You may want to speak with traditional agents to compare services.
The bottom line is that commissions are not set in stone, but you do get what you pay for in most cases so make sure you understand to what services you are entitled for what you are paying. If you are not happy, you should be able to fire the agent.
Thursday, August 31st, 2017
I’ve seen a lot of changes in the real estate industry over the last 14 years, and one of the biggest has been the increase in the number of “teams.” A team is a group of real estate agents who work under one broker. For example, say John Smith works for Real Estate Company, and he forms a team of 10 agents. They all work for Real Estate Company, but they work together with John Smith as his team members; multiple agents may work together with a client during a home sale or purchase.
Many people wonder how a team can benefit them if they are a buyer or seller, and whether it makes more sense to hire a sole agent or a team. Needs and opinions will vary, but here are the reasons I feel that working with an experienced sole agent, rather than a team, can truly benefit buyers and sellers:
1. Facts and details. As a sole agent, my clients know they are working with ME. They will not have to deal with a slew of other agents, assistants, secretaries or other people. If they have a question, they will be able to reach ME. I always answer my phone and if I am with another client or in a meeting, I call back quickly. My clients love this, because I know what is going on at all times in regards to their sale or home search. In turn, it benefits me because I do not have to check in with someone else to find out what is going on before calling or visiting a client.
2. Relationship. I have ALWAYS said the real estate is not just about selling property – it is about forming a relationship with the person who is entrusted to handle a legal transaction on your behalf. Buying or selling a home or investment property is fraught with legalities – you need to know that the person you select to help you truly has your back. I believe (and my clients confer) that it is easier to form a relationship with one person who is dedicated to serving you.
3. Connections. Team members often claim that they provide superior service because they have a bevvy of “exterior” (not agents) experts – loan officers, escrow officers, title people, contractors, etc. Well, guess what? Sole agents have those too – in fact, I have a list with many kinds of referrals that I have compiled over the years, and my clients reap the benefits.
4. Numbers game. As a sole agent my goal is to be there for my clients. I don’t focus on how many sales I can make, but rather on how I can best serve each individual to the best of my ability. If I cannot then I will not take on new clients. The key is dedicated service, not a numbers game.
People have different opinions on how their needs can best be served when it comes to real estate transactions, and that is great. If you are planning on buying or selling real estate, it is important to figure out what you expect from your relationship with your agent or team, and to make that clear up front. Most importantly, make sure you find an area expert who has experience selling homes. A large percentage of agents have secondary jobs and do not think of real estate as their career – find one who is a professional.
Monday, August 7th, 2017
Many of you know that I have written often of the perils of dual agency. Case in point: I received a phone call today from a woman whose sister is working with an agent to purchase property. The agent also represents the seller.
Apparently the buyer and seller executed a contract. The seller, four days later, realized a mistake was made and they should have asked for a higher price. The agent let the buyer know that they were to sign an addendum for the higher price. The buyer did not agree and was fearful that the seller could cancel the contract. Her initial deposit money is already in escrow and escrow is open.
I do not represent this person and have not seen the contract. I did not provide legal advice but rather told the caller what right a buyer has under basic contract law – unless of course there is a clause in the contract giving a party more rights or altering the general rules.
Here is the bottom line: as a buyer in a real estate transaction, where there is a fully executed contract and no party has breached, and where there have been no alterations of contractual obligations pertaining to rights to cancel or amend, as long as a buyer performs his or her duties under the contract on time the seller does not have a right to cancel the contract. Parties of course CAN mutually agree IN WRITING and signed by all, to alter material terms, but if a buyer does not agree to do so it does not generally give the seller the right to cancel if the buyer is not in breach of contract.
Once again this problem is a result of dual agency- how can an agent who has a fiduciary duty to the seller (who wants to change a material term), also fulfill a fiduciary duty to the buyer (who does not agree)? This is a big pitfall of dual agency and a big reason for real estate lawsuits. I advised the caller to contact the agent, contact escrow, and if necessary contact an attorney.
Wednesday, August 31st, 2016
A good real estate agent is golden when it comes to assuring that all your needs are met as a buyer – from searching for the right home to negotiating, to making sure all obligations are met as a buyer and that everything needed from the seller has been provided. It not just about getting to the close of escrow, but also about protecting your legal rights as a buyer and making sure there are no surprises once you do close escrow.
When it comes to the purchase of a new construction home many buyers end up using builder sales representatives, partly because they are there on site and make it easy, and partly because buyers do not know why this can actually be detrimental when it comes to their rights. Here are the top reasons why working with your own real estate agent can help you when purchasing new construction:
1. Dual agency dilemma: When you work with a builder representative, their first allegiance is to the builder. Once they represent you as well then dual agency comes into play. If you are a frequent blog reader you know how I feel about dual agency (click here to read more), and the dangers it brings. In the alternative, it is better if you have your own representation so that the allegiance is only to you – that person can look our for ONLY your best interests.
2. Extra set of eyes and problem solver: Once again, if you have your own representative Realtor to look over the new construction contract then s/he may point some things out to you that you might be able to alter to suit you better. For example, including items that do not come with the home, or extending deposit dates. A good real estate agent is there to assist you and make sure that you benefit. The builder does not care to whom it pays the commission – they just want to get the home sold. Even if you the builder uses its own contract (as opposed to state or local real estate association documents), your agent can still be with you while the documents are presented and help you decipher them.
3. No extra cost to you: Many buyers make the mistake of believing that if they work directly with a builder sales representative, they will save money on the purchase of their new home. This is not true – the builder takes into account the commissions when setting home prices. The builder wants to sell the home, and while it may (key word – “may”) pay out less commission to an on-site sales rep, most builders do cooperate with brokers and advertise such. A buyer is not going to gain anything by working with an on-site sales rep versus an outside agent. In fact, an outside agent who is a good negotiator may be able to help negotiate perks and price adjustments on your behalf. Either way the builder is going to pay a commission, so why not take advantage of independent representation – someone who has ONLY your interests in mind and not those of the builder. There is no cost to you as a buyer.
When looking at the possibility of purchasing a new construction home, make sure you are well represented. Your interests should be first and foremost.
Monday, May 23rd, 2016
If you are a real estate agent or a home buyer you may notice that the market is obviously low on inventory right now. Being that it is the “selling season” of Spring/Summer, and since there are a lot of buyers out there looking at homes, there are many situations involving multiple counter offers and homes selling for well over asking price…all great if you are a seller. However, there are also some fishy things going on out there and it is frustrating to agents and their buyers.
Let’s take a look at what is happening:
1. Homes listed well over comparable value. Many, and I mean a LOT, of homes in North San Diego are being listed over market value – some slightly and some way over. Buyers, who normally would avoid such homes until the price drops, are flocking to them and making offers anyway. No one seems concerned that the home likely will not appraise, and if one buyer walks there are many more who will step right in. This is pricing out first time homeowners and bringing prices up…you may think the latter is good, but it is dangerous because such inflation could create problems for the market – especially when there are many buyers who have incomes that will price them out of neighborhoods they should have been able to afford had prices reflected comparable sold values.
2. Many sellers are taking a long time to respond to offers – even very strong ones. If a buyer makes a very strong offer over asking price, many listing agents are waiting for 4 or 5 days to even respond, during which time they collect more offers. Many then submit multiple counter offers to all bidders asking for the best and highest price. This prices many potential buyers out of the running, and most already submitted an offer slightly over their budget.
3. Sellers are refusing to make repairs or pay for reports. In a seller’s market the seller knows s/he is in the driver’s seat, and many sellers are countering back stating the home is sold as is, and that they will make no repairs and pay for no reports – like termite reports. They want the cleanest offers possible with the least amount of money out of pocket. This means the buyer can get stuck with multiple repairs, termite work, etc. If the buyer is already paying top dollar for the home, s/he has to make sure those things are affordable. No one wants to see a new foreclosure wave hit in a few years.
4. Appraisals are not coming in at contract value – but that is not deterring sales. I have not had problems with appraisals on listings (I don’t market properties in the “insane” price category), but have heard from many agents who have. Even if the home does not appraise at contract value, there are plenty of buyers who are willing to pay the difference in cash if sellers will not negotiate prices down to the appraised value. They feel that is the only way to secure a home purchase in these crazy times. Does this sound like 2003/2004 – “pre-crash” – to anyone else besides me?
5. Overly aggressive listing agents seem to be multiplying, and they are not being cooperative. There are many listing agents who are ruthless and even rude. They don’t care that your buyers love the home and have been looking in that neighborhood for a long time, or that they wrote a very strong offer and submitted it first. To these agents, it’s all about playing the game and finding the highest bidder. Some agents do not return calls and emails, and some violate the Realtor code of ethics – a few may even commit fraud. It is extremely frustrating for buyer’s agents, who are trying to find a home for their well-qualified buyers.
6. Pocket listings and homes listed “off the MLS” are increasing. Many agents are marketing their listings on third party sites like Zillow, and not placing them on the MLS – the cooperative tool used by Realtors to benefit all parties looking in particular areas/price ranges. While it is their right to do so, it makes a problem for buyer’s agents whose clients may see these listings and want to visit them – but when their agent calls the listing agent to make an appointment she is often told that the seller is not paying a commission to buyers’ agents. Imagine you have been helping your buyers for months to find a home and now you cannot show them this one home because the broker will not cooperate with your broker. It puts buyer’s agents – who play an imperative role in protecting buyer’s rights – in a very sticky situation. You may ask why listing agents do this: the answer is so they can find buyers who will work with them, thus saving the seller from paying out a commission to the buyer’s agent. Hopefully the California Supreme Court will soon put an end to double ending sales and this will no longer be a problem.
I am a bit concerned and hope that we are not heading into trouble in the real estate market. I hope that agents keep in mind the spirit of cooperation that is inherent in our business – we all need to work together and be fair. If we do not then buyers and sellers will not be protected from future lawsuits, and many people will be priced out of the housing market – which could cause a domino effect with local economies and eventually the US economy.
Tuesday, May 17th, 2016
There are too many mistakes made by real estate agents – some come from a true lack of understanding of the legalities that are inherent in buying and selling real estate, and others from ignorance, selfishness or stupidity. But either way the fact is that real estate agents need more training and licensing requirements should be much stricter.
I was contacted last week by a lady who felt she had been taken advantage of by her current agents. They failed to inform her about the process of accepting a particular tricky offer, and the ramifications associated with doing so, in order for her to make an informed decision on whether to accept the offer. They did not explain many other things she had the right to know. She was beyond frustrated.
The reason this home seller called me is that she had been referred to me, and liked my legal background – she wanted to fire her agents and have me list the home. I counseled her on the terms of her listing agreement, and provided options and advice; in the end I told her she should try to resolve issues with her current agents so that she could get her home sold since they had already done so much work, while renegotiating some terms and making clear that she needed to be kept in the loop throughout the process. She said she felt much better after speaking with me, and I was glad to help.
The listing agent team she was working with is seasoned, so I was rather surprised that they did not provide information and explanations on many of the forms and processes that come with selling a home. They also charged a 6% commission fee, and they offered 2.5% commission to the selling agent, so they were planning to make 3.5% on the sale! She tried to negotiate with them but they would not do so. She was told that was standard and she had no idea that commissions are negotiable. But I am more disgruntled with other aspects of the sale that I feel were not handled properly.
It is time our national, state and local associations set up mandatory training programs for every agent, and license renewal programs that touch on much of that training so that agents are reminded of their professional and legal responsibilities every time they have to renew their license. Here are some suggestions:
1. Real estate exam – this needs to be more difficult and more expensive to take – that will keep those out who are only in it because they think they will make a lot of money.
2. Across-the-board mandatory training programs – these need to be implemented for all new agents – every broker must comply. This will ensure that all new agents have the same degree of basic knowledge about real estate and law, and the practicalities of sales (forms, paperwork protocol, transaction management, etc.).
3. Stricter license renewal requirements – these also need to be addressed, because the license renewal requirements could be more challenging.
4. Stricter punishment for ethical violations and breaking of laws – as the current rules stand in my state, an ethical violation may or may not be punished – it all depends on whether the agent on the other side of the violation, or a disgruntled buyer or seller – reports the behavior. Unfortunately many do not, because they do not want to be involved in a situation where they are pointing a finger. Agents especially do not like to get involved in ethical hearings because they feel their reputation may be at stake for calling out a fellow agent – thus many unethical agents continue to slide downhill. Punishment is also not meted out often enough or enough to match the crime. The same is true of agents who break laws, like committing fraud. Reporting and punishment need to change.
The real estate business would benefit immensely from the above changes – real estate agents would be a more educated, professional and savvy group of people, and home buyers and sellers would win in the biggest way.
Monday, April 25th, 2016
For years the idea of lowering real estate commissions has been the topic of conversation amongst many in the real estate industry. Since the discount brokerages came onto the scene in full force back in the early 2000s, many home sellers have sought out agents who will cut commissions to save sellers money. Could lower commissions eventually become the norm?
A recent study by Realtor Magazine indicated that 62% of buyers and sellers want lower fees in real estate transactions, yet of those 22% still want to receive quality service and worry that low fees do not go hand in hand with that type of service. So while sellers want to pay Wal-Mart fees, they obviously still want Nordstrom service.
I have written many blogs over the years about the benefit of working with agents who provide stellar service – not just in marketing a property or knowing a neighborhood, but with respect to the very important legalities of real estate transactions – negotiations (by the way, 89% of sellers in a recent study indicated that negotiation was the number 1 skill they desired of their real estate agents), paperwork, disclosures and other potential liabilities.
Many sellers for years have complained that it is not right that an agent can be paid 2 1/2-3% of the purchase price for a million dollar home and the same for a $300,000 home. The real question is how much work is that agent doing? I personally know of listing agents who “list and pray,” doing virtually no or little work to market a home and bring a buyer without spending time or money out of pocket. Also, what about the buyer’s agent who has been working for months with her buyers, showing them 20, 30+ homes, driving the around to show them areas and being there on hours of phone calls, writing offers…that agent gets nothing until she actually closes a sale, which may or may not happen.
If you wonder what agents actually do, here is a list of some of the things your agent should be doing…so do not be afraid to ask your agent what he or she is doing for you.
1. Marketing – this varies vastly so make sure you understand the marketing plan that is proposed
2. Open houses – if desired
3. Broker caravan
4. Professional photography
5. Creating custom flyers and other marketing pieces (mailers, ads, emails, etc.)
6. Showing advice/preparation and staging, if necessary
7. Handling all paperwork and explaining it all to you
8. Showing the property (being available to do so – you’d be surprised how many agents are not)
9. Negotiations with the other party/agent – this does not stop after a contract is signed, as it is still often necessary for repairs/credits.
10. Providing a list of repair people if needed
11. Constant communications with all parties involved – agents, lender, escrow, title, and of course, you
12. Making sure you have copies of your entire file at the close of escrow, and helping with other things like finding agents out of the area if you are moving somewhere else, or helping you synchronize closings of current and new homes. I have even helped clients move out and clean up after everything is taken from a home.
Of course each listing may require a different plan, and some may need more pre-listing work or more marketing than others, which of course means more money. So, will lower real estate commissions eventually become standardized? That remains to be seen but hopefully if they do, quality service won’t go down with them.
Wednesday, February 24th, 2016
If you are a real estate agent who works in Carlsbad, or a seller/potential seller in Carlsbad: keep reading because your business or home sale could be affected by the actions of the City of Carlsbad. If you work in the real estate industry in Carlsbad, please attend the meeting to discuss this issue on March 15 at 10 AM at the Carlsbad City Hall Council Chambers – PLEASE ATTEND and spread the word!
Over the last few weeks the City has been out on weekends collecting real estate open house signs (and also yard sale signs). All the signs are brought back to city offices and dumped in the back of a building. Many years ago the City enforced their regulation that states that signs may not be placed in public right-of-ways inside the City. But for many years this has not been enforced; now all of a sudden, without any warning, signs are being confiscated. Click here to see video shot by Michael Greco of Guild Mortgage.
What the City is doing is unfair and interrupts business and home sales. Here are the reasons why:
1. Traffic interrupted/Loss of potential buyers for home sellers: Agents who hold open houses are working in the best interest of their sellers to find a qualified buyer. Sitting open houses takes time and costs money – without signs to guide people to the homes we are missing out on a large percentage of possible buyers. This is not fair to the home sellers, who want to draw as much traffic as possible in order to find that one qualified and excited buyer.
2. Monetary cost to agents: Open houses cost money – we spend money on advertising, the signs themselves, printed materials and snacks. Not to mention our time – we take 3-4 hours out of a weekend day to market the home for our sellers. Without signage we will waste money and time.
3. Waste of city resources – signs are temporary: Signs are out for 3-4 hours, and agents of course take them down because they are expensive and we don’t want them thrown away. Paying city employees for time and gas to take our signs down is a waste of city funds – I can think of many better ways to use the resources (that would require a VERY long and opinionated blog so I’ll spare you).
4. No clear definition of “public right-of-way:” To me, a public right-of-way is a space where the public has access, like a sidewalk. I would not want a sidewalk blocked with a bunch of signs. However, many agents post their signs back from the sidewalks in grassy or dirt areas, so that no access is blocked, and again placement is temporary.
No matter how you look at it, what the city is doing creates an economic impact on the real estate business. As brokers and agents we work hard to promote our listings for our sellers. We want to bring in as much traffic to these open homes in the hopes of finding a buyer. This creates many missed opportunities.
The city has not returned calls regarding this situation or information on the meeting. San Diego ABC channel 10 will soon by doing a story on this and hopefully the city will provide more information. All agents and brokers who work in Carlsbad: Please attend the meeting. There will be media presence and we need to fight for our rights to market our clients’ homes.
Friday, February 12th, 2016
If you are a regular reader you know that I have a thing for ethics and those who violate the boundaries of professionalism in any field. We’ve all known of someone who crosses or has crossed the line. The real estate industry is no exception. Here are the most common ethics breaches made by real estate agents:
1. Going after other agents’ clients. Amazing, but yes there are slimy people out there. This actually just happened to me – another agent took advantage of my client in a very sneaky way. When an agent knows that someone is a client of another agent, to go after that person in order to get them to work with you is not just unethical, but it’s nasty. Karma will get all those people one day, but they really should not be in the business if they cannot be professional and respectful. That agent’s reputation will suffer, especially among area agents.
2. Not disclosing relevant information. This happens all too often. Some agents actually advise their sellers to NOT disclose information that could affect a sale – such as problems that have occurred in the home (broken pipes, electrical problems, roof leaks, etc.). Again, not only is this an ethical violation but it is illegal. Many lawsuits are initiated because buyers were not made aware of past problems – it is one of the main reasons for real estate lawsuits. I tell all my sellers that it is better to over-disclose than leave anything out. If you lay it out on the table it is up to the buyer to check out any issues and make informed decisions.
3. Telling home inspectors not to notify of problems or directing what should/should not be in a report. It is hard to believe but there are agents who do this. One home inspector told me that a successful area agent once told him not to notify him (the agent) of any problems concerning the roof, and to leave them out of the report! I couldn’t believe that. That is far more than an ethical violation – it is illegal. Things like this apparently go on all the time. Thus the reason you need an excellent home inspector that you trust, and also whom your client can trust. Mine is also a civil engineer and a licensed contractor – a little piece of mind goes a long way in preventing problems and legal action down the road.
4. Taking referral fees from lenders or others specified by law or statute as not allowable. This is a big no-no: unethical and also illegal.
5. Giving a client advice that is not in their best interests in order to secure a sale. Clients need to make their own decisions on whether or not to buy or sell a property. The role of the agent is to make sure the client receives all the pertinent information in order to make an informed decision. I never make decisions for my clients – rather, I offer my expertise in answering their questions and concerns. If there are problems with the property that are inherent and could cause issues down the road, I always point that out and suggest expert advice when needed. The ultimate decision belongs to the client – our role is to facilitate providing information. Encouraging a client to buy or sell when it may not be in their best interests is unethical.
There are many other glaring examples of ethical breaches in the real estate industry, and there is always the agent who invents a new one. But the above 5 examples are perhaps the most dangerous because they are crossing over into breaking laws and could have legal consequences. This is why all agents need strong training programs and continuing education to keep them abreast of new rules and laws.
The real estate industry needs to crack down on agent training and make cross-the-board mandatory programs, as well as stricter licensing requirements. Brokers also need to take responsibility with stricter oversight of their agents (if I was paid $1 for every time I had to call another broker to report something their agent did that jeopardized a contract, I would have a lot of dollars). Until such changes are set in motion we will unfortunately see more ethical/legal violations in the industry.
Thursday, January 21st, 2016
The real estate business has definitely evolved over the last few decades, with the growth of technology being the main contributor. But when it comes down to it, working with a real estate agent is not just about finding a savvy salesperson, but rather it is about finding someone who truly has your best interests at heart and is willing to work hard to find the right property or sell your home, at the right price, with the best terms. It is not so much a sales relationship as it is a trusted adviser relationship. An agent plays many roles throughout the buying and selling process – researcher, chauffeur, adviser, negotiator, paperwork coordinator, and therapist – to name a few.
As they always will, many people try to come up with ways to find and convert “leads” to clients, from advertising to cold calling to handing out cards to people all day long and asking for referrals from past clients, friends and family members. In the last year I have seen some interesting attempts to woo potential buyers and sellers, and although I am impressed with those who are trying hard, I must say I have been surprised at some of these methods:
1. Recorded Calls: I received my first recorded sales call from a real estate agent last year. I was surprised because the agent, who had a lot of enthusiasm, sounded like he was trying to sell me a used car. He went on and on about how he could help me buy or sell a home, and about his strengths as an agent. Now, I must say that selling real estate is not difficult – anyone can do it. BUT not everyone can do a great job at taking care of the PEOPLE, the clients. I have always said that this business is not about houses, it is about people.
2. Print Marketing: Marketing via mail and email has always and will continue to be a very strong way for the real estate agent to get business – s/he creates a lovely flyer or brochure and lists skills and past sales and testimonials to make her/him look amazing. S/he even uses words like “Number 1 agent” and “Top agent,” “sold more homes than anyone else.” The trick is that many agents can say these things by putting a spin on the information, and these statements can be true.
Many of these advertisements actually constitute ethical violations in my opinion (and I have been trying to get the rules changed to prevent this, but that is another story). For example, if you are a broker who oversees say 30 buying agents, and among those agents your brokerage or team sold 100 homes last year, how is it ethical for you yourself to claim you sold over 100 homes last year – you did not do that personally, your agents contributed many of those sales. But to the average homeowner who receives your marketing piece, you look like you have done more business than anyone else. Glossy marketing pieces with claims to being “the top producer” do sway the average Jane and Joe many times. Like the political arena, I think that if agents are going to make claims like this they need to explain the truth behind the claims.
3. TV Commercials and movie theater advertising: These types of marketing can also be valuable, but again the time is limited and the agent has only a few moments to convince you of how incredible they are at their job. There is no fine print – but if it gets you to remember their name and call them then the piece has achieved the goal set by the agent. Again, anyone can make a great marketing piece that makes them look like the best agent ever – and of course that is what all salespeople try to do.
4. Broker Calls to Agents About Homes “Coming Soon” to the Market: This newest method is interesting, and is aimed at local area agents. A broker has an agent make calls to other agents’ voicemails, reading from a script about a home that is not yet listed on the open MLS but soon will be – they tell the agents (it seems agents are chosen based on who sells the most in a given area – not all agents receive these calls) that they are giving them a chance to show the property to their buyers before it hits the MLS. Now, if you happen to be an agent working with a buyer and get a call describing the perfect home, this could be a win-win for your client. But if you are an agent and do not get that call, or if you are a buyer looking online and waiting for the perfect home to pop up, you are truly at a disadvantage in such a situation. So this can be a good or poor method of advertising, depending on how you look at it.
5. “Coming Soon” Listings Posted on Third Party Sites: There are some third party sites (such as Zillow and Trulia) that allow agents to post “coming soon” listings. Not all agents can do this – they must pay to become an elite member of these sites, and then they have the “privilege” of posting such properties. It’s great for the agents – they likely get at least some calls from potential buyers – but for those buyers who are not looking on those sites they get the short end of the stick if the home sells before hitting the MLS. Similarly, agents can send out e-flyers or emails about listings that are coming to the market soon, and if this is done fairly (sent to ALL agents in a county), then that is a great advertising tool. It is not fair to the potential buyer who is not working with an agent and who waits for properties to list on the MLS, but of course this is just one of the many benefits of working with an agent (we tend to hear about up and coming listings from many industry sources – agents, appraisers, lenders, sellers, etc.).
From my perspective I believe that all agents should be able to advertise and “sell” their services and skills. But I think there are 2 rules that need to always be adhered to by real estate agents and brokers: 1. Keep it classy. 2. Be honest and ethical. If the local real estate associations who govern agents and make rules set out to make the rules stricter, I think it would be beyond valuable to potential buyers and sellers.
If you are looking for a real estate agent, remember to get the full picture – what can s/he do for you that is different from other agents? Make sure you will not be just a number – some agents have teams of people working for them and they represent many clients – if you like this than great, if not you may want to look for an experienced agent who treats you like you are the only client. Everyone has different needs, so make sure you get all your questions answered and find the person who is best able to help you; shiny materials and boasts about being a “top producer” should play into your decision minimally (although you do want someone who can sell your home with strong marketing and advertising abilities), but you need to feel comfortable with the person and what s/he can offer you.