This familiar trope has been around at least since May 12, 1908 — the date the National Association of Realtors (NAR) was founded with the goal “to unite the real estate men [sic] of America for the purpose of effectively exerting a combined influence upon matters affecting real estate interests.”
Since then, the organization has grown to approximately 1.45 million Realtors. Another 600,000 (more or less) licensed non-Realtors also practice real estate in the USA. That’s a lot of real estate agents!
Given the value of the industry, it’s easy for a consumer to conclude (correctly) that many of these 2 million agents must be inactive, don’t do many transactions or don’t view real estate as their primary job.
That gives rise to another to yet another trope: “Real estate agents bring no value to the transaction.” Go ahead. Admit it — now that technology has usurped the “search” function of real estate agents — you are thinking: “Why should I pay a real estate agent 3% to sell me a house that that agent has never seen and knows nothing about?”
Many agents – especially the housewives, hobbyists and part-timers – have no ready answer to this question. “We have,” they might respond, “been doing things the same way for 113 years. It’s worked pretty well so far. Why should I change now?”
I, on the other hand, have been a licensed agent since 1979, and a Maryland Real Estate Broker since 1983 (38 yrs!). I have served as an agent, an associate broker, a branch vice president for a national brand and currently am the broker/owner of a medium-sized real estate company serving the Delmarva Peninsula of Maryland and Delaware. I have, at one time or the other, practiced residential, commercial, new homes and luxury (waterfront) brokerage. I have even developed a waterfront Planned Unit Development (PUD) and an office building. Sometimes, I feel I have seen it all.
But no two work days are ever the same. I have learned a lot along the way and continue to do so. I attribute my longevity to this curiosity and my willingness to change and adapt to dynamic conditions. I am passionate about real estate . I believe I continue to be relevant and that I add a lot of value to the constituencies which I serve: buyers, sellers and real estate agents. I am hoping to convince others to share my curiosity and willingness to change.
Now that I am in the fourth quarter of my career, I plan to use this space to pass along the lessons I have learned and put paid to the two tropes articulated above. All real estate agents are not the same and some agents earn every penny they are paid.
I am a proud Realtor member of our local Board – the Mid-Shore Board of Realtors. I fully support their skilled advocacy of high ethical standards, professionalism, and fair housing. I am openly critical of their low threshold to entry, their resistance to change, and their bureaucratic inflexibility. I see both sides of the public perception of real estate agents. Given rapidly evolving technology that empowers the consumer as well as vigorous and well-funded legal challenges to the traditional business model, I believe that change is inevitable.
All real estate agents are not the same!
Contrary to common belief, good real estate agents often add more value to a transaction than they charge in commission. Calculated and viewed in hourly increments, real estate agents often make far less than the average local doctor, lawyer or Indian chief. I hope you will use this blog to guide you to one of these agents.
A growing number of consumers (both Buyers and Sellers) want to “own” the real estate transaction from inception through settlement. How hard can it be? Now that you, the consumer, can find the house of your dreams using Zillow, Realtor or my website shorelocals.com, how hard can it be to make your own dream come true? In future installments, I plan to describe the real estate transaction in full from the dream to the day of closing. I hope to be fully transparent and share with you all the obstacles, pitfalls and solutions I have found in the past thirty-eight years. I plan to share with you how you can make your own dream come true yourself (DIY)
I also plan to fully demonstrate my belief that a good real estate agent earns every dime they are paid.
Timing The Market
Zillow, and to a lesser extent other portals, empowered consumers to “search” the current inventory for the home of their dreams on their terms without the services of a “pushy and aggressive” real estate agent. Zillow and other portals quickly gained traction in the “sellers” market of 2006 and benefitted greatly from the introduction, in 2007, of the Apple iPhone. Prospective buyers could now browse active real estate listings while standing in line for morning coffee at Rise Up Coffee. Prospective sellers used the Zestimate (auto valuation tool) to watch the value of their homes appreciate steadily and precipitously. It was just like having an ATM machine in your living room.
Some of us saw it coming. Prices could not continue to appreciate 16-20% per year. We knew a correction was coming – we just didn’t know exactly when and how much of a correction was coming. The Chief Economist of the National Association of Realtors predicted the “bubble wouldn’t burst.” If anything, it would be more like a “soft landing”. Trusted real estate advisors could see the soaring prices being paid and cautioned our customers. “Don’t wait to come to market!” I like to think we saved some of our clients from loss in the Great Real Estate Recession of 2008. Real estate values subsequently dropped 38% across the board. Ouch!