Consumers Are Idiots. Especially When it Comes to Real Estate
March 7, 2008
When people are in deep legal trouble do they price shop attorneys or do you think they choose the best of the best to represent them?
If you won the lottery would you hand your money over to the kid who just got his MBA or the experienced financial planner with a proven track record and a portfolio full of satisfied clientele?
Now for the real estate connection, if you were going to sell your $750,000 home, would you hire an agent with 2 years of experience and 6 total sales or a 7 year veteran with over 30 sales annually?
These questions are supposed to be rhetorical. Yet consumers consistently choose unqualified real estate agents to assist them with the sale of what is likely their largest financial asset - their home. Buying and selling real estate involves a plethora of legally binding contracts that come with plenty of legal and financial consequences if certain clauses are not fulfilled within the agreed upon time frames.
In Texas, it is not uncommon for a buyer to deposit $15,000 in earnest money for a $500,000 home. Once under contract, if the buyer misses a deadline the buyer will legally be in default and the seller has the right to request the $15,000 as “liquidated damages” in accordance with our state promulgated contracts.
Don’t get me wrong. Realtors are not attorneys and this is a highly unlikely scenario, but if you yourself don’t know where to dot your i’s and cross your t’s, wouldn’t you seek out the assistance of a highly trained professional that is intimately familiar with the contract verbiage? Of course you would. So then why would you hire your aunt (or friend, or friend of a friend) who you know doesn’t have the credentials of other successful agents in your area?
Why wouldn’t you seek out a successful Realtor with a proven track record? “But aren’t all Realtors qualified to represent their clients professionally and equally?”, some might ask. I want you to think about that logic. Are all attorneys and doctors equally qualified just because they made it through medical or law school? The truthful answer is a resounding, “No!”.
Choosing a less than qualified Realtor with poor negotiation skills or lack of knowledge in your market area can cost you thousands, if not tens of thousands, of dollars due to your lack of due diligence.
My friend and colleague Lydia Player gives her take on why people make such stupid and uneducated decisions when it comes to buying and selling real estate,
“The only problem is, most folks hire someone they know or someone who is recommended to them - regardless of ability.”
I couldn’t have said it any better myself. Is there a solution? I don’t know. What I do know is this, when you mix that much emotion with what should primarily be a business decision, all bets are off.
Jeff Duffey is a Realtor with Coldwell Banker Residential Brokerage in Dallas, TX where he was born and raised. He provides an unparalleled level of customer service to all of his clients regardless of price range. With over 5 years of expertise he has consistently ranked among the Top 10% of all Realtors nationwide each year he has been in the business. Jeff feels that educating his clients about the nuances of the home buying/selling process is one of his most important responsibilities as a Realtor and finds this helps his clients enjoy the smoothest transactions. This focus on education coupled with his superior market knowledge, strong negotiation skills and marketing strategies sets him far apart from his competition. His clients seem to agree considering over 95% of his business comes in the form of referrals.
Jeff's interests include playing competitive USTA league tennis, volleyball, traveling and he loves to talk about real estate. Full of advice and opinions, he enjoys being engaged in "spirited" dialogue.
Contact him at 214-507-2878.
You can reach Jeff on the web at http://www.duffeyhomes.com/
You can also email Jeff at jeff@duffeyhomes.com
[…] Consumers Are Idiots. Especially When it Comes to Real Estate, by Jeff Duffey. […]
In a lot of cases, I think people hire the agent to represent them based on a recommended sale price… for sellers at least. I guess that would be like picking a lawyer that says “I’ll get you out of going to jail” without asking all of the particulars of the case first.
Most sellers have a price in mind before they ever talk to an agent. And I have seen many sellers choose the agent that came closest to that price. The problem is that sellers typically think too highly of their home so they eliminated the agent that actually did his or her homework that suggested a lower, but more realistic, list price.
The other issue is that of customer service, negotiation skills, transaction management skills, follow up and problem solving abilities. All of these things are what makes a great agent and it’s these things that should be taken into account when choosing the best agent for the job. The price is a colaborative effort between the seller and the agent and should be discussed after a seller has agreed to work with an agent.