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In the last five years, the number of real estate agents in our area - Jacksonville, Florida - has grown from 6,000 to 9,300, a 50% increase. Those are remarkable numbers.
From the outside, success looks easy, so the real estate industry attracts numerous hungry, bright-eyed newcomers. Additionally, the barrier to entry in real estate is incredibly low in Florida. After a 40-hour class and a state exam, sales agents are unleashed onto the public.
But wait, is that person really prepared to assist consumers in one of the largest financial transactions of their lifetime?Real estate consumers can, and should, take care when selecting an agent.Selecting an agent should be similar to choosing an accountant, financial advisor or home contractor.
A few questions and considerations when evaluating your next real estate agent:
How many transactions has the person done? How many do they handle annually?
Real estate transactions can be nuanced and complicated. The more transactions an agent has handled, the better prepared they will be in guiding you through some of the tougher parts of the deal. Everything from contract preparation to negotiating deal terms to navigating personality conflicts requires experience.
Knowing how to professionally and intelligently advise a buyer or seller comes with practice. For example, I have worked with agents on the other side of a deal who did not fully understand customary fees and thus left their customers surprised and saddled with unexpected expenses at the closing table.
I have also seen agents fail to mark certain items for inclusion in the transaction, making for a difficult closing situation and an unhappy customer. It’s no fun for a buyer to walk into a house with no refrigerator when they assumed it would be there.
After a certain number of transactions, the contract terms become rote to a good agent.
The inspection period is typically the most challenging phase of the buying and selling process, and this is where experience is key.
We have had situations where a buying agent’s customer had no awareness of how the timelines worked and the buyers thus lost their opportunity to request repairs that they had the right to request prior to the contractual deadline.
As far as numbers go, agents who deal with higher price points typically do not have the same annual volume of transactions as agents who handle low to mid-price points. So, recognize that transaction volume is sometimes related to the price point, but the point is transactions = experience.
A good rule of thumb is that an experienced agent should be handling at least 12+ transactions annually. Higher price point agents will have fewer sales (anywhere from 12 to 40 on average) and top lower price point agents may have as many as 60+ transactions on an annual basis.
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If you are looking for a listing agent, how many listings does the agent typically handle annually? How many listings do they currently have?
If you are selling your home, you are much better off with a seasoned listing agent.
An infrequent lister does not necessarily have the systems in place to best serve a listing. Listings require marketing savvy and a robust communication process that is not necessarily part of a buying agent’s skill set. Listing experience is cultivated over time.
Some agents specialize in working with buyers or sellers, many top agents do both. As you are interviewing potential agents, ask what percentage of their sales are listings when interviewing them. A regular lister will likely get at least 50% of their sales through listings.
If you have a $1M+ listing, ask the agent how many $1M+ transactions they have handled in the last two years? Then ask how many of those were listings?
In a luxury listing, it is even more critical to understand an agent’s level of experience. Why? In this higher price point, the listing agent will likely be dealing with some very seasoned agents and some very seasoned buyers. Your agent needs to have the conviction and finesse to deal with this particular cast of characters.
To give you some parameters, at least 30% of your luxury agent’s business should be in the $1M+ range.
Finally, pay attention to the agent’s listing presentation. How sophisticated is it? Can they easily talk about past sales and similar properties? Do they have a marketing plan? Do they have a communications plan? Do they follow a proven system? If so, ask for a copy so that you know what to expect.
Is the agent full-time? Should I hire my neighbor/agent?
Buying and selling a home is not a casual business transaction, so you should not choose a causal agent. Full-time agents are going to have the transactional experience and time needed to get the job done. It stands to reason that if real estate is one’s bread and butter than more than likely that person has a stronger commitment than a more casual part-timer.
Don’t get me wrong, there are some fabulous part-timers out there, but just know that the less business one does, the fewer tools they have in their toolbox to address the tough issues that arise in a real estate transaction.
Additionally, it’s likely a bad business decision to entrust a sweet friend or relative who does a sale or two a year with a business negotiation of this level. If you go this route, be prepared to invest additional time to carefully review the documents and contracts you are signing as your agent-friend may not be prepared to provide insightful advice.
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You’ve been emailing and talking to an agent. Are you required to work with them?
Agents are buying leads from online sources like Zillow left and right. Some agents buy leads in zip codes they aren’t particularly familiar with.
Just because you are connected with an agent by clicking a link, does not mean you have to work with that person. Do some online research and investigate the person you are hiring (see the next two items regarding research).
And when you are speaking with them, take some time to test an agent’s knowledge.
Does the real estate agent have a website?
Is it critical for an agent to have a professional website? Perhaps it isn’t a dealbreaker, though, in an industry where the digital landscape plays such a key role, it’s typically a disadvantage. And for a luxury agent, I’d say it is a must. If the agent does not have a website, do they have a digital footprint?
Zillow and Realtor.com both track an agent’s recorded sales. Look the agent up in their agent finder tools.
You can also review the agent’s social media pages to determine their level of engagement in the real estate business and to gain a sense of their personality. Beware though, there are some agents who are great at social media - sometimes so great, they don’t actually have time to sell as they are so busy promoting themselves on social media.
The agent’s statistics are probably more important than the number of Instagram posts they are churning out.
Does the agent have reviews? Can they provide a list of references?
A real estate agent’s reputation is directly tied to experience. Check to see if there are online reviews, and ask the agent to give you the phone numbers of a few current and past customers as references. Zillow, Realtor.com and Google Business pages are the best sources for finding reviews.
In sum, there are real estate agents a-plenty. It is your job to separate the wheat from the chaff. Like the Pareto Principle, 20% of the agents are doing 80% of the transactions. And, that 20% is usually there for a reason.
Using this list of questions should help in identifying the right person to meet your real estate needs.
And, if you have real estate needs in the Jacksonville area, feel free to reach out.
Gwinn Volen is a real estate agent at Ponte Vedra Club Realty. See her website or call her at 904-314-5188.
