Why Do People Choose the Wrong Real Estate Agent?
Choosing the right commercial real estate agent can be daunting. As a property owner, you’re constantly inundated with phone calls and direct mail from brokers hoping to win your business. A quick google search would result in 10-15 different local firms, none of which offer any discernable advantage over another.
I am not here to convince you as to why I am the right choice. Instead, I want to highlight the typical traps I see people fall into as they go through the process of choosing a broker.
I have spoken with thousands of property owners throughout my career, some of whom were thrilled with their broker. Conversely, I’ve found that an even larger population left their transaction feeling unsatisfied. I have distilled their complaints, and my observations into what I believe are the 4 most common mistakes owners make when choosing a real estate agent:
1. Hiring by Proximity
Human beings are naturally comfortable with what they know. Proximity doesn’t strictly refer to nearness in time and space, but more importantly, it can signify closeness through a relationship or social circle.
The divestment of real estate is a complicated, costly, and time-consuming process. Small mistakes are magnified through massive dollar losses. And despite the scale of the transaction, sellers often exert very little brainpower in finding the right real estate broker. Property owners feel comfortable hiring the agent from their church or the broker that just sold a building in their neighborhood, even if they’re not the most qualified to handle the deal.
So, if we know that individuals fall into this trap, what’s the solution? Personal recommendations are great, but you shouldn't forgo quality for the ease of finding a broker.
2. Failure to Interview
Interviewing multiple real estate agents is an awkward concept. It’s easier to hire the guy down the street and cross your fingers, hoping for a smooth transaction. After all, did you interview your attorney or your CPA? Probably not, but should you have?
Taking ownership of vetting your real estate broker is vital to ensuring a smooth transaction. Trust is earned, and an agent should display competence before being hired.
An introductory consultation is a great way to meet a broker and get a feel for their personality, but it should not replace a formal interview. Knowing the right questions to ask and assessing if an agent is the right fit needs to be a deliberate process.
3. Every Real Estate Broker Says the Same Thing During the First 5 Minutes
Most real estate agents are polished. Like any sales-oriented professional services occupation, brokers have a well-practiced pitch, and they can usually successfully navigate the first meeting. What happens after that meeting is often a mystery.
I frequently hear that after an agent secures the listing, the property owner is left wondering, “what next?” Is the broker actively marketing the property? Are they even at the office? Are they at the beach?
This lack of transparency breeds resentment. Sellers want to know their needs are met, and their broker is actively working on their behalf. Don't get caught up in the first 5 minutes of the meeting. Instead, demand a plan of action from your agent and establish quantifiable metrics to hold them accountable through the process.
4. Scope and Specialization
Not all brokers are created equal. Of course, some are more experienced and skilled than others, but an agent’s consistency of efforts is where the difference is made.
Every day, most real estate brokers are pulled in ten different directions. They have a small office lease to structure, or a retail showing across town, or need to prepare for a new client meeting. Their inconsistency of effort often leads to disappointing results.
It would help if you found a real estate agent that has a focus. An office leasing broker with a Rolodex of hundreds of tenants shouldn't work on your portfolio's recapitalization strategy. Just as a middle-market investment sales broker probably shouldn’t handle leasing your retail strip center.
Understanding a broker’s niche and skillset will better inform your decision in choosing the right real estate agent for the job.
As a real estate owner or investor, your team of advisors can largely determine your success. Your broker should have an in-depth knowledge of local market trends and an instinct into what makes you tick as a buyer or seller.
If you have questions about the Raleigh or Triangle markets or want to talk about finding the right real estate agent for your needs, let’s chat.