I noticed this podcast in the news the other day... https://www.bizjournals.com/au... and objectively speaking as a consumer who seeks to find true value, is it worth more to go with a Full-Service Realtor who is incentivized to find the best deals for their customer or; to go with a business model which emphasizes quantity over quality, potentially leaving $ on the table as well as lack of personalization?
In my 20 years of experience, I would say most people over simplify the experience and the process and have a hard time determining what value any one particular realtor offers. For example after 20 years I know the softball inspectors from the hardball inspectors. I want my buyers to have the toughest most detailed inspectors out there to inspect their buy and give them as much information as possible about the house. Many buyers think it is as easy to go on Yelp and pick one. But where do the inspectors get those reviews....most will be from a one time encounter from a buyer who really doesn't know a bad or good inspector from a great one after one inspection.
I can tell you in Texas I am licensed to do business anywhere, but if I were buying a property in Amarillo, El Paso, San Antonio, Houston or some other city I don't know, I would be hiring a great buyer's agent. One that will know which side of the tracks I should be on, knows information about schools, and economic development changes, knows which neighborhoods have good or bad reputations, etc. Where the new trader joes is going in, things like that. I don't know the first thing about Houston...I also don't know the market there in terms of contracts....how much option money, how much earnest money, how much down is the norm and the difference that will win me the offer.
A great realtor can save you money in so many ways...like picking the right lender. Online reviews don't tell you what the closing costs are.... I see closing statements.....so I see the fees and interest rates. It's strange to me people focus and negotiate $2000 or $3000 on the price of the house, and then choose a horrible lender that could cost them thousands in fees and interest. Get the right realtor and they can recommend the best vendors that might save you a ton of money in other areas.
If you're choosing a burn and churn broker, they have to make the volume and may not go to inspections with you or closings with you or take the time to keep a list of the best vendors and trades you will need over time. There's all kinds of models out there that work. Some people want McDonalds, some want the Palm, and some people want something in between. You just have to figure out what you value and what you don't.
@Henry Paarz there are so many variables that I think an experienced investor focused agent brings a lot of value.
They can walk the property, help build a pro forma, adjust line items based on their walk through, etc.
There are a lot of crap properties that look good on a spreadsheet. Without a realtor to make sure reality matches the spreadsheet you could be stuck with a crap asset and paper returns.
How about from an Investor or Seller's perspective? What happens when market conditions change in the future?
In my 30+ years I have seen a lot of ups and downs in the real estate business. The reality is right now most properties in many areas are receiving multiple offers in day or even hours. So right now i would want an agent that is a good negotiator and pays attention to all the details in multiple offer situations instead of an agent with the glam marketing campaign. a few years ago I would have wanted the glam campaign. The market is always changing
With BP being an investor site with many owning multiple properties and have experience with the buying and selling process. BP members therefore often place a lower value on agent. However the vast majority of buyers and sellers go through this process a handful or two times in their lifetime. For them, the full service agent is of the highest value and is necessary to get the job done
@Bruce Lynn LOL "where the new Trader Joes is going in" - obviously where you want to be.
Great response though! You gotta build contrast to gain a better perspective.
I'm a long-distance investor (my wife and I own property that we've never seen) and own a transaction coordination business so I've seen even more deals.
Greg made a good comment in that the average BP member knows more about validating if a property is a good deal or not from a numerical perspective.
However, the agents I've hired and the agents I work with who build great investor businesses focus on adding value that you can only get on the ground.
For example, I want to know more about the property that I could ever learn about online. For example:
- As mentioned above: is the local trader joes going in there?
- Do locals avoid this area? Is it more tourists?
- Does this street smell bad, due to it's location to nearby businesses? (more common than you'd expect)
I went to Penn and I see you're in Philly. An agent who told their customers to look at fishtown ~5 years ago (before the "numbers" made it look good) probably made their clients a ton of money and made a client for life
Hope that helps!