HOW REAL ESTATE AGENTS WANT TO CONTROL THE PROCESS

 There are basically three ways they want you to select an agent:

1. By market size. Agents with a large market share become familiar to you by their shear presence and you are more likely to hire someone familiar to you. You will see their name on yard signs, ads in the newspaper, on the grocery cart at the neighborhood grocery store, etc. With all that exposure they must be a top agent and knowledgeable so you decide to hire them.   
2. By referral. Agents grow their business by having people refer new clients to them.
3. By chance. A lot of people simply end up with an agent. They weren’t looking for one but they connect with one because of the agent’s marketing. You stop by an open house, call the yard sign, email them from their internet listing, etc. and before you know it they are showing you homes.  

Agents work this way because they are in control of the process.

Agents make money by accomplishing two things;

1.                  Being the “rain maker” and making it rain clients. The primary job of an agent is to continually secure new clients and most of their marketing is geared towards this. This is what successful agents focus on because this is where the money is.

2.                  By working the transaction.  Once they have a client someone needs to show them homes and get the deal closed.  This is the part you care about. How you are handled while buying a home.

. I remember reading a book for “top producing millionaire agents” and the advice was to minimize your time working the transaction because you can only become a rich agent by marketing and getting new clients and to not waste too much time actually working with buyers. The mindset is to focus on getting clients and hire other agents to actually work the transaction.

WHAT THEY AREN’T TELLING YOU; Agents make money in real estate by using  marketing to drive in new clients and anything that takes away from that time will decrease their earnings.

AN INSIDERS TIP; There are many very competent agents who are great at handling the transaction but aren’t great at making it rain clients.  Don’t define success by volume of sales but by how competent they are.

I was representing a buyer who was ready to offer $960,000 for a home that was listed at $999,000. The home was originally listed at $1.3M and was on the market for over a year so the agent was motivated to move it. It was listed by the #1 agent in that market. She had a team of agents working for her and she was great at making it rain clients. Before we made an offer I asked her about any activity on the home and why it hadn’t sold yet. She went on to tell me how it was recently in contract but the buyer couldn’t sell their home. Then they said, “It was in contract for $950,000, oops, I guess I shouldn’t have said that.” My buyer didn’t have a home to sell and was in a strong position so with that knowledge we adjusted our price to $940,000 and they took it without countering.  Her comments didn’t help sell the home. But they did cost her seller $20,000. She is great at getting listings but is she really great at negotiating for her clients?