Are you choosing the right agent?

A few ways an agent’s approach can affect the outcome of your transaction. Agent – Someone who acts on behalf of another person.
As a Real Estate Agent works on their client’s behalf naturally trust is needed; the principal (buyer or seller) needs to be able to trust their real estate agent. This is true now more than ever, the real estate market is more complex than it’s ever been, there are more laws, lender rules, and sellers in all different situations. Not only that, buyers can be in all different situations as well, some might be completely ready, others could just need a few tweaks to their financial situation in order to be ready.

It’s natural that many people nowadays need good information before proceeding with their real estate move. Of course, if the client owns a house and has equity in it, they often just want to know what the market is like, how much they can sell their house for, and how long it might take. Asking what the market is like is a totally fair question, we all hear a lot of things on the news… how much of it is true?

The questions and answers are just as serious when the client owes more than their home is worth. There are many options for people in this situation, it’s important that people know what they are. Just as in an equity situation, the client’s choice of agent is absolutely critical, the agents ethics and approach to business is very likely to make a big difference in the outcome for the client and their family.
Hard Seller vs. Consultative

Most importantly, is the agent a hard-seller or is there a more consultative approach? If the agent is more of a hard-seller, then you’re most likely going to hear the solution that is in the agent’s best short term interest, not your best interest. An agent’s interests and a client’s interests do not always conveniently align. In a perfect world an agent would almost always prefer to have a closing or a listing occur as quickly as possible. However, sometimes selling quickly is not necessarily in a prospective client’s best interest, they might prefer to stay in their home if possible.

One way to easily determine whether or not an agent has your best interests at heart is to bring up the subject of loan modifications, if the agent can speak knowledgably without being dismissive of the subject then there is a good chance you’re working with an agent who is committed to being well informed and honest. Many times I’ve been to short sale seminars where the speaker is very dismissive of loan modifications “they almost never happen” they say. However, the speaker is almost always selling something that has to do with short sales, naturally they will be dismissive of the loan modification option. Likewise, it is not in the agent’s best short term interest if you prefer to stay in your home and decide not to sell but instead work for a loan modification that could take six months. Most agents would prefer that you list your home, even though it could be a short sale (meaning that more is owed than it’s worth).

The hard-selling vs. consultative approach is also important for those who have equity. Often I hear stories from sellers about an offer coming in low, and their agent pressures them to take it, even though it might not be in their interest to do so. In this instance it is wildly important that the clients feel they can trust their agent. It can be difficult for a client to know if an agent is pressuring them or if the agent really does believe that the offer represents the best that client will be able to sell the house for. Hopefully the seller’s agent is able to give solid reasons to take, or not take the offer, but it still comes down to trust.
A commitment to keep learning

Another important factor is if your agent constantly works to stay up to date with the latest news in the real estate world, or is the agent just along for the ride? Just a few years ago it was easy for agents just to work with a few clients at a time, before long there would be a transaction, and money often came pretty easy for agents. For the most part this is no longer true, agents need to work a lot harder to make money, yet some agents still use the same take-it-easy approach. This same take-it-easy agent is unlikely to be current on the latest information.

Not to say that all agents who are dismissive of loan modifications are lazy or full of selfish intent, they may just not be up to date with the facts. As agents, we don’t get paid to help with loan modifications, we’re not even licensed to do them. However, we should be able to know when a modification makes sense and to point someone in the right direction.
Short term vs Long term approach

Remember above I pointed out that it may be in the agent’s best “short term” interest to give helpful consultations to their clients. From a selfish perspective, the hard selling approach could seem like the right way to go at least in the short term. However, there is self interest in the consultative approach as well, it’s just a longer term view. Suppose an agent meets with a client who at the beginning of the meeting is ready to sign a listing contract and start the short sale process, why on earth would the listing agent provide any other guidance? The only possible reason is that the consultative agent has two goals, one is to have a steady income, and the other is to be the Trusted Advisor for their clients. To have this perspective, an agent would need to assume that honest straightforward advice will motivate their clients to spread the word about the agent among their friends and family.

The results of a hard selling approach may result in the single transaction and the clients could even be satisfied enough to tell a friend about that agent. However, the longer term approach of the Trusted Advisor type of agent will almost certainly result in clients who are better advocates. The key then is to be a Trusted Advisor type of agent who can also sell when the time is right. For example maybe someone calls to see a listing represented by the Trusted Advisor agent, in this case some sales skill can really pay off! Therefore, the ability to have a balanced approach is really the best way.