Thursday, March 24, 2011

When to Get a New Real Estate Agent

Real estate agents come in all different stripes, but it takes a personal experience to hammer that home. As my bio says, I'm a management consultant for institutions in the real estate industry, and have been working in the real estate space for several years. But recently, my wife accepted a tremendous opportunity for her career in Houston, so I've been busy doing consumer things in the consumer world: trying to find a place for us to live, at least for a year, while we get to know the area to decide where to purchase.

The experience of looking at the real estate industry through a normal consumer's eyes is... interesting. I'd like to relate a few of the experiences I've gone through and am still going through here, starting with...

The Subscriber's Voicemail Is Full

So I travel down to Houston, taking a couple of days, to locate a house that my brood and I might transform into our lair while we settle in. I find a pleasant, professional real estate agent to help me with my search (wave to everybody, Sara Nguyen of Prudential Gary Greene), and use the various online tools on to conduct the search. I'll have a word or two about that experience later.

Together, Sara and I narrow our options down to a couple of neighborhoods, and a dozen houses or so. We start going through them rapid-fire style on Monday, so I can narrow the choices down. We get to one house that looks
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"I'm so sorry, Rob, but this house... I need a few more minutes," she says.

"Why is that?"

"Well, I've been trying for the last four hours to get a hold of the agent here to make an appointment, and she's not answering her phone."

I had noticed that Sara was awfully busy while we were touring the four previous houses. Now I knew what she had been trying to do.

"I tried to leave her a message to call me back as soon as possible, but her voicemail is full."

Say what now? I pull my Blackberry out of the holster and check: yep, it says right there that this is year 2010. For a moment, I thought I was back in the days when Motorola RAZR was the hot phone, and voicemail was this new thing that people didn't know how to use.

By sending her a couple of emails, leaving messages with her office, and perhaps by divine intervention, Sara gets a call back, and we're able to go in and see the place. I like the house, seems like it'll do for a temporary hideout, and talk it over with my wife that evening. We decide that we'll take it.

The next day finds me in Sara's office filling out applications and lease agreements. We're not in the least bit worried about approval; my wife and I are homeowners, have been for some nine years, have good credit, and the rent is cheap to our New Jersey eyes. We send the forms over, and I hope to have cashier's checks ready to go by the afternoon.

In the age of instant communication, of Twitter, Facebook, email, email on mobile phone, text messages, and so on, I figure it'll be a couple of hours before we hear back and can start negotiating the fine points of the lease.

Four hours pass without a word. Sara, in a near-panic, tells me that she's tried the other agent's phone a dozen times. "Her voicemail is still full, so I can't leave her messages, and she's just not getting back to me at all."

I'm about two minutes away from deciding to say screw it, and move on to our second choice house, when the other agent finally calls Sara back.

If Your Agent's Voicemail Is Full... Fire Her

I'm not going to bore you with the details of the negotiation, which still has not concluded, because, guess what, the other agent rarely answers the phone, and her voicemail is still full. But as a trespasser in Consumer World, let me suggest something: If your Realtor's voicemail is full, you've let her know this, and it's still full after an hour... fire her.

This agent, whose name I never learned, came within two minutes of losing her client the deal. In my case, he almost lost out on a great, stable tenant who would take care of his property, pay the rent on time, and won't make a fuss (without a very, very good reason). If I had been a buyer, her client might have lost the deal completely, simply because she can't be bothered to delete old voicemail messages (or answer the phone for that matter).

Let me be charitable and assume that perhaps the other agent is Hillary Clinton, moonlighting to supplement her income, while she tries to negotiate some treaty with Azerbaijan. That might be great for Azerbaijan and American foreign policy, but if you are Realtor Clinton's client, you're gettin' screwed.

Within the industry, we've heard that consumers are getting more demanding. Consumers want answers immediately, we hear. You'd better get on Twitter, and get that iPad, and have four mobile phones to deal with the impatient consumer - that's what we hear. Well, from Consumer World, let me suggest that the reason why consumers might be impatient is that we live in 2010, and we have jobs, and we have clients, and we know that we have to respond when our boss or our client calls us. We have mobile phones and voicemail too, and we know how they work. We're pretty reasonable folks, I think, but not when your damn voicemail has been full for two days and you can't be bothered to take five minutes to delete your three-month old messages!

There are complexities to being a real estate agent these days, I get that better than most people. But the essence of being an agent is to represent the client. Tell you what, it's awfully hard to represent your client when you don't pick up your phone, and people calling you with offers can't leave messages because your voicemail is full.

As a buyer/seller, or a landlord/tenant, your financial future might hang in the balance in a real estate transaction. Even if you are renting for a short-term, like I am now, you have to make decisions, and usually with very little time. Using a real estate agent who can't even be bothered to check (and delete!) voicemails might be your choice as a consumer, but don't be surprised if you're having trouble selling that house of yours.

Oh, and if you happen to think that technology is the solution -- well, someone who can't even be bothered to pick up phone calls and deal with a full voicemail inbox is not exactly a prime candidate for using avatars in SecondLife to do real estate transactions. Yes, the industry itself needs to do better at pruning out bad agents. Brokers need to do more to train, educate, and discipline agents who (in theory) work for them. But you, as the consumer, can do more too: stop hiring morons.

One clear sign? Her voicemail is full. Move on, friend, move on. Find someone else. Because I, and millions of consumers like me, will find another house instead.

Why Home Buyers Can't Evaluate Real Estate Agents

What do home buyers expect from a real estate agent? The answers might surprise you, and go a long way to explain the reasons why buyers are ultimately disappointed with the one they pick.

An interesting result from the good people at the National Association of Realtors from their survey of home buyers on what it is that consumers value in a Realtor: Honesty and integrity. Knowledge of purchase process. Responsiveness. And so on.

These all sound like wonderful things to want in the professional you're hiring to help you spend the most you've ever spent on anything, if you're in the 99.999 percent of the population who doesn't own a private jet.
But there are some odd things about this survey and its results.
Of the nine skills/qualities listed, over 79 percent rated eight of them as "Very Important," while only 40 percent rated tech skills as "Very Important." I find that bizarre. What's more bizarre, though, is that only 85 percent of respondents rated communication skills as Very Important.

Judging by these results, it seems to me that the survey question probably asked, "Rate the following skills and qualities of a real estate agent from Not Important to Very Important." Clearly, people weren't asked to rank these qualities in order of importance, as that would not result in four of the qualities scoring above 90 percent. So... who the hell are the 15 percent of See photos of homes for sale in your area and across the country on AOL Real Estatepeople who thought communication skills were not very important? Are there that many people walking around saying, "Hey, it's okay if my agent mumbles on the phone and writes nonsensical emails"? According to the results above, one out of four single male buyers couldn't care less if their real estate agent has no people skills and has the manners of a Taliban enforcer attending a Women's Rights Rally. Really?

But there is a more fundamental problem, and one that actually impacts the consumer experience.

Assuming you do think things like honesty and integrity are Very Important to you... how exactly would you know if your agent has them?

It isn't as if people -- even if they're Realtors -- walk around with signs around their necks saying, "I'm not really honest all the time, and my integrity is somewhat shaky." Until you work with someone for a while, go through some ups and downs, and have reason to verify that the person is in fact honest and has integrity, how could you tell?

Professional services are full of these problems, which I call the "Great Lover" problem after an illustration by Marty Neumeier. Someone comes up to you and claims, "I'm a great lover." Is there some way of knowing whether he or she is right or wrong, short of going to bed and experiencing it for yourself? Lawyers say they're competent -- but short of having them handle a case for you, how could you tell? Doctors might tell you they have great judgment under pressure of a crisis in the operating room, but how would you know? References from past clients (or lovers) help, as does diplomas, degrees, credentials ("Black Belt Lover, Third Degree"), but all of those are substitutes for personal knowledge, which only comes from working with that professional.

For real estate transactions, the problem is compounded by lack of experience of the consumer. Most people buy or sell a house once every seven years on average. If you buy your first home at 30 (which is sort of on the early side), you're ready for retirement by the time you've had your fifth transaction. During that same period, you may have dealt with a doctor hundreds of times.

Consider some of these "Very Important" skills and qualities. "Knowledge of the purchase process" is one. If you've never bought a house before (as I strongly think would be the case for single men and women), how in the world are you going to be able to evaluate how much your real estate agent knows or doesn't know about the purchase process? Exactly what part of the process will you able to step in and say, "Hey, wait a minute - you're not doing that right"?

What about knowledge of the real estate market? If you, a random consumer, know more about the real estate market than your real estate agent who does this day in and day out, why on earth would you (a) hire her, and (b) not work as a real estate agent yourself? It's like my saying that a heart surgeon's "Knowledge of the cardiopulmonary system" is Very Important to me, except for the fact that I don't know jack about the cardiopulmonary system and would have to take whatever Doctor House has to tell me at face value.

This is the reason why I don't believe various consumer ratings of real estate agents have much value at all, even when it comes from past clients. They simply lack any basis to form judgments about the quality of service they received. Sure, they can tell me things about basic customer service issues, like Responsiveness or Communication Skills. But unless they've been actually ripped off, defrauded, or caught their agents in a baldfaced lie, they're going to assume that the agent was honest and had integrity. And unless they are real estate professionals themselves, there's no basis on which they can evaluate an agent's knowledge, negotiation skills, or transaction management skills.

In fact, something that experienced real estate agents talk about all the time is the fact that the opposite is more likely to be true: that consumers think the agent who put forth heroic efforts on their behalf is awesome, even though that heroic effort was necessary because the agent screwed something up badly, while smooth, trouble-free transactions make them think the agent was lazy or didn't negotiate hard enough, even though the reason why everything went so smoothly was due to the agent being a master at her craft.

So consumer reviews of real estate agents is not particularly meaningful. You know what would be meaningful though? Real estate agent reviews of other real estate agents. I, for one, would like to see what qualities and skills Realtors think are important, ranked in order of importance, and then see them rate each other on it after each transaction.

Of course, I would also like to have Steve Jobs leave his fortune to my favorite charity: The Rob Hahn Foundation for Education (Of Rob Hahn's Children)....