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Agency Problem

Michael Flack

MOST PEOPLE THINK that selling real estate is the flip side of buying. But in most cases, selling is a very different enchilada, and that should drive who you hire as a REALTOR®—and, yes, that is the preferred style.

Buyers face an almost infinite list of potential properties to purchase. Initially, almost every house is a possibility. As the buyer and agent review the buyer’s requirements, the list is whittled down until the dream home is found.

The buyer relies on the agent’s knowledge of school districts, neighborhoods, streets, commutes, property taxes and so on. The agent’s knowledge of all the real estate available is vital to the buyer making an informed purchase.

This process requires a certain amount of togetherness, as both buyer and agent review the ever-changing list of requirements, while driving around in a luxury SUV, touring houses, drinking coffee and talking on the phone.

The importance of getting along cannot be overstated. Buying your dream house using an agent you don’t like is at best problematic and at worst the fifth circle of hell. There’s no point in hiring an agent—even one with the negotiating skill of Chester Karrass and the local knowledge of Gladys Kravitz—if you just can’t stand him or her.

Selling real estate is very different. Instead of an almost infinite number of homes under consideration, there’s only one. Sellers only care about the agent’s knowledge of one school district, one neighborhood, one street, one property tax bill. If sellers determine that the best person to sell their home is a little bit of a jerk, who cares? The amount of time they’ll spend together will be limited—especially if the agent is any good.

If the real estate gods were to appear before buyers and vouchsafe that, if they were to pay 10% more, they’d be assured of buying the perfect home, most would accept the offer. But if the gods appeared before sellers to say that, for 10% less, they’d get the most well-mannered agent, one who’d provide the most fabulous gift baskets and remind everybody of their favorite aunt, sellers would reply “no, thank you” or, more likely, “Are you high?”

Viewing a buyer’s agent and a seller’s agent as two different specimens might at first seem to make real estate transactions more complicated. In fact, it can make selling much more straightforward: Interview as many agents as necessary to find the one who will sell your home for as much money as possible. This may take time, so it’s best to start the selection process well before you plan to sell.

What about selling your house using the agent who helped you buy the place? That reminds me of my wife’s choice of a hairdresser. She continues to use him not because he does such a great job, but because they have become friends. What would he think if he found out she went someplace else?

My advice: Former home buyers who are now sellers should send for the sons-of-bitches. Let’s face it, “This is no time to go wobbly.”

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macropundit
macropundit
8 months ago

The only house I’ve bought was with Redfin 2 years ago. I don’t understand why people depend on an agent to find the home they want. It’s so easy now to schedule and look at a home via that app (and the person that shows you the home isn’t usually your agent) and there’s so little friction why not just look at the neighborhood yourself instead of having someone else select what you’ll see? Then when you’re ready to make an offer your agent gets involved and does that and the handholding and such.

mjflack
mjflack
8 months ago
Reply to  macropundit

macropundit, People completely depend on an agent to find a home for the same reason people completely depend on an agent to sell their home: either because they are too busy or lazy to put in the effort themselves. Selling your home is like finding a job – it takes work, and you cannot rely on an agent to do all the work.

Jack
Jack
8 months ago

What about the Realtors who only represent buyers? Is there some advantage to hiring them?

mjflack
mjflack
8 months ago
Reply to  Jack

Jack, I’ve never worked with a buyer only agent, so I cannot comment.

Laura E. Kelly
Laura E. Kelly
8 months ago

The advice for shopping around for a shark realtor if you’re selling makes sense. We’ve tested the waters over the years about selling our place, and the 5 or 6 (non-shark) realtors we’ve interviewed usually gave us an offputting laundry list of things we need to “improve” before they would help us put it on the market. And the sharkiest realtor gave us the least hope, talking about how small our house was, how our school district is lower ranking than the one in the next town (that was news), and how having a downward-slanted driveway is a “buyer turnoff.” Can’t do much about things like that!

Now that it’s a seller’s market we are thinking again about selling (maybe hungry buyers will overlook the slanted driveway?) but still haven’t figured out where to find an affordable place where we’d like to move. I think we’re stuck with the slanted driveway (which has never bothered us) for a few more years.

mjflack
mjflack
8 months ago
Reply to  Laura E. Kelly

Laura E. Kelly, thank you for your comments. While you don’t want to spend too much money getting your home ready for sale, that laundry list could be thought of as a checklist, which if followed could enable you to sell your home for more money.

Chazooo
Chazooo
8 months ago

What, no comments?? 🙂

mjflack
mjflack
8 months ago
Reply to  Chazooo

Chazooo, thanks for priming the pump.

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