3 ms·

What differentiates real estate agents in terms of "skill"? It seems like their access to information of products available for sale would be the only useful s

What differentiates real estate agents in terms of "skill"? It seems like their access to information of products available for sale would be the only useful service a from a real estate company. Of course, granted knowledge of which houses are available, helping the buyer find something they like is important but could this not be done with a google street view type system?

mooreds 11y ago
Here's what differentiates realtors. * negotiation (they negotiate tens of deals a year, as opposed to your negotiating one every few years--they should know the ins and outs of all the levers of a real estate contract) * property valuation/neighborhood knowledge (the school lets out and a crowd of slouching teenagers walks through here every day/this street isn't plowed by the city/etc). * access to inventory (some agents will have access to extra houses because of past clients) The agency problem can be dealt with if you have an agent who wants your business and knows that the LTV of a happy customer is higher than the money he can get from putting you in a house you don't want. The harder problem is selection--buyers/sellers tend to shop on referral or cost because, like any other profession, laymen have a hard time judging competency. Source: I worked for a real estate brokerage as a software developer for a number of years. [edit: formatting--geez, when can we get markdown here :) ]
SteveGerencser 11y ago
It could. But the last two properties we bought were purchased through an agent before they were listed on MLS. I've discovered that there is a pre-sales lag between properties being put under contract and being listed on MLS. Agents call and find out what hasn't been listed yet. It worked out great for us in the last two purchases. But it may also not be typical.
malyk 11y ago
mooreds answer is spot on. I'd add that experienced agents also know how to spot potential issues when touring houses, what work you should and shouldn't do to prepare your house for sale, and can provide a network of providers to help you close your purchase/sale (lenders, contractors, landscapers, etc.). I thought I'd also mention the company I work for, HomeLight (www.homelight.com). We're trying to provide transparency into real estate agent performance to help people select agents that will actually provide value to them during a property purchase or sale. There are over 2 million licensed real estate agents in the US. The average number of transactions per agent per year is under 2. Good agents can provide tremendous value, but finding those gems is really tough, especially when agents, until recently, tried very hard to hide their past performance. Also, a lot of markets don't really require a lot of work from agents. In SF for instance, you can list almost any property and get above asking price for it after one weekend of open houses, but that doesn't hold for other markets, which can make the 5%-7% commission feel like you're being cheated. When my wife and I were looking for houses in the East Bay (Oakland and Berkeley mostly) our agent was average. She would send us property dumps for the entire city of oakland (we had no interest in east oakland, but she kept sending us properties there) and she didn't respect the way I wanted to communicate with her (email...she called me all the time), and she didn't provide great guidance on what we should offer on properties we were interested in. But, she did a good job showing us properties and pointing out issues, figuring out all the open house times, communicating with other agents, introducing us to a great loan officer, etc. I /could/ have contacted all the listing agents for the 10 properties we wanted to see a week myself, but she did that for us, which saved a ton of time. Agents that are "bad" are ones that won't return your calls, don't listen to your needs, try to show you properties you aren't interested in, don't know the area you are interested in well, can't identify when a roof probably needs to be replaced or if someone just painted over the black mold in the basement corner, hooks you up with crappy loan officers, etc. And unfortunately, there's a TON of those agents out there.

mooreds 11y ago

Here's what differentiates realtors. * negotiation (they negotiate tens of deals a year, as opposed to your negotiating one every few years--they should know the ins and outs of all the levers of a real estate contract) * property valuation/neighborhood knowledge (the school lets out and a crowd of slouching teenagers walks through here every day/this street isn't plowed by the city/etc). * access to inventory (some agents will have access to extra houses because of past clients) The agency problem can be dealt with if you have an agent who wants your business and knows that the LTV of a happy customer is higher than the money he can get from putting you in a house you don't want. The harder problem is selection--buyers/sellers tend to shop on referral or cost because, like any other profession, laymen have a hard time judging competency. Source: I worked for a real estate brokerage as a software developer for a number of years. [edit: formatting--geez, when can we get markdown here :) ]

SteveGerencser 11y ago

It could. But the last two properties we bought were purchased through an agent before they were listed on MLS. I've discovered that there is a pre-sales lag between properties being put under contract and being listed on MLS. Agents call and find out what hasn't been listed yet. It worked out great for us in the last two purchases. But it may also not be typical.

malyk 11y ago

mooreds answer is spot on. I'd add that experienced agents also know how to spot potential issues when touring houses, what work you should and shouldn't do to prepare your house for sale, and can provide a network of providers to help you close your purchase/sale (lenders, contractors, landscapers, etc.). I thought I'd also mention the company I work for, HomeLight (www.homelight.com). We're trying to provide transparency into real estate agent performance to help people select agents that will actually provide value to them during a property purchase or sale. There are over 2 million licensed real estate agents in the US. The average number of transactions per agent per year is under 2. Good agents can provide tremendous value, but finding those gems is really tough, especially when agents, until recently, tried very hard to hide their past performance. Also, a lot of markets don't really require a lot of work from agents. In SF for instance, you can list almost any property and get above asking price for it after one weekend of open houses, but that doesn't hold for other markets, which can make the 5%-7% commission feel like you're being cheated. When my wife and I were looking for houses in the East Bay (Oakland and Berkeley mostly) our agent was average. She would send us property dumps for the entire city of oakland (we had no interest in east oakland, but she kept sending us properties there) and she didn't respect the way I wanted to communicate with her (email...she called me all the time), and she didn't provide great guidance on what we should offer on properties we were interested in. But, she did a good job showing us properties and pointing out issues, figuring out all the open house times, communicating with other agents, introducing us to a great loan officer, etc. I /could/ have contacted all the listing agents for the 10 properties we wanted to see a week myself, but she did that for us, which saved a ton of time. Agents that are "bad" are ones that won't return your calls, don't listen to your needs, try to show you properties you aren't interested in, don't know the area you are interested in well, can't identify when a roof probably needs to be replaced or if someone just painted over the black mold in the basement corner, hooks you up with crappy loan officers, etc. And unfortunately, there's a TON of those agents out there.