Friday, 4 December 2015

The Three Kinds of Real Estate Agents

Real estate salespeople may seem all the same to some, but in my experience, we are not all made equal. It's one job where your skills, knowledge and abilities can vary so widely. It can be a little surprising. This may be true for other career choices as well - lawyers, doctors, waiters, and über car drivers all become more skilled with experience. As a real estate salesperson, I have come across some very impressive salespersons who have clever market strategies, thorough knowledge of a given neighbourhood, and good results for their clients. Then there are those who are slippery as a wet banana, out-of-touch or have lack in experience, and put their clients best interests at risk.

Over years of working in real estate, I often place my fellow colleagues into three categories. There may be many more ways to do this, but I thought I would make it simple. In the world according to me, the three kinds of real estate salespeople are the non-transactional agent,  the transactional agent and the referral agent. Let me tell you a little about each and which one would be your best bet.

 The title for these agents sounds impressive - transactional agents! And often their experience at turning over transactions make them very skilled at the rules and regulations. They often try to turn over as many transactions as possible. Many work in teams because it is tough for one person to turn over the number of transactions required to be the top producer at the end of the year. This creates a lot of .01% agents who do a lot of marketing with tens of thousands of mailouts. Their goal is to turn around as many transactions as he/she/they can. The reason?  It's good for them: They make a lot of money quickly. The reason that's bad: They don't necessarily build relationships and show their worth. So they rely on a constant stream of  new clients. The focus is on making money, turning transactions quickly and finding new clients. 

The landscape of real estate agents has changed remarkably over the past five years in Toronto. For starters, there are A LOT of real estate agents in this city. Now to be fair, every one has to start somewhere and learn their business. I admire those who are taking a stab at working as a salesperson in real estate. It's a competitive market, especially in Toronto and Vancouver. In Toronto, for example, 70% of new agents will drop out in the first two years. Many will not make a sale at all. Then there are the part-timers - the firemen, the nurses, and teachers who try to do real estate on the side. The thing is when you turn over one or two transactions a year (or less), you really don't have a chance to hone in on the important skills like pricing a property correctly, developing marketing strategies and negotiating. Even something as basic as filling out an offer are full of problems because the person has so little experience. As I said, everyone has to start somewhere, and deserve to learn, but as a consumer, do you want to be the test pilot for an inexperienced agent or one that has worked five years in the business, but have only sold or bought five to ten properties?

This is the kind of agent you want to have. These agents have experience and focus on doing a great job so that clients will recommend them to their friends and family. Through their results, these agents create raving fans, and subsequently grow their business. It's not that they are selfless angles  who want to make their clients happy. They work hard and making their clients happy because they make more money from it. Both sides win. For the real estate salesperson, it can take more time to cultivate these kind of relationships, but they do pay off in the long run.

It's like many other professions. If I want a good massage therapist, you often ask a friend for a good referral. Same goes for a good restaurant, a good dentist, a good cleaning person and a good dog walker. The good ones are worth finding.

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