18 Jul 2017

Why Do Agents Pitch Themselves As Area or Suburb Specialists? – Real Estate Myth Busting

There is a lot of agent training which suggests that only the agent who is a recognised suburb specialist or area specialist is going to make it in the super competitive world of real estate agents. Oh and usually, the trainer’s spiel is trying to sell a pricey package on how to become that mythical creature – The Area Specialist.

I’m going to risk offending many real estate trainers here, but many of them have spent a miniscule amount of time as an agent, didn’t make it and so, set themselves up training other would be super stars, who are looking for a quick fix on the road to success.

In effect, the third party trainer, or self appointed "Guru To The Agents", is selling the agent on how to become that imaginary go to person; where ready sellers walk in the door of their agency offering their houses to sell without effort on the agents part. Those trainers have their own business model, agent coaching program etc., or barrow to push and the premise is based on greed, and probably laziness - not buyer behaviour. So now you will have an understanding of why so many agents try to say they are your local area expert, because it builds their profile and lines their pockets.

In my last blog we blew the myth on what time of year is the best to sell. Here is the link but the short version is – when you are ready! When is The Best Time To Sell Property?

In the spirit of Myth Busting, I’ll call this one early and then present my case.

The Best Agent For You Is Your Local Suburb Specialist - Bunkum I say!!

So let’s pull this myth apart as a case study. Agent X promotes themselves as the area expert thus justifying why you should list with them, they have made more sales than their next competitor and they know prices in your suburb better than anyone else, plus they have buyers waiting! 

Here are some reasons I question the relevance of that position.

  • Does your buyer care who you list with?
  • Does the buyer ONLY buy from an agent who they have spoken to previously?
  • Where do the majority of buyers find the home they buy?
  • What percentage of buyers come from an agent’s database?
  • Does the buyer care if the agent knows everyone in town, the date of the next school fete?
  • Does the buyer care if the agent sold the house next door?

No, nuh, close to 90% of buyers find the house they buy on the real estate portals, about 2.5% of buyers learn of a property directly from an agent; which is less than the number who find the home they buy on a sign, nope and nup!

Now I’m not discounting the fact that it is helpful to know all the local nuances of a particular suburb, but to be fair all of that information is available on Google, and the average Buyer has done so much area research THEY are the actual expert on what’s going on locally. They researched all of that before they chose your suburb as a contender.

So when an agent positions themselves as the suburb or area expert, they are actually sending you a very different “Bubble Talk” message. “I know everything, I know exactly how much your house will sell for. As the local hot shot I’m entitled (Grr hate that attitude) and you are a loser if you speak to anyone else but me.” So the big read there is EGO.

You would be forgiven for thinking the advantage a so called area expert has is that they know exactly how much every last sale in the area sold for. In fact that information is freely available on realestate.com.au and other subscription property information services, it’s available to everyone. 

But being a price expert can be both good and bad. If all you want is a price setter, well that much they can do, based on the last 6 months sales, as in past, has been sold – is no longer for sale, old news. Can they predict the future, of your sale or anyone else’s – No, and I’ll provide evidence for that in a bit. Given that you are about to sell, I'm going to assume you have been doing the same research and have a really good idea of what your property is worth right?

So area specialist warning here; when ego and complacency (or entitlement) mix, opportunity can be lost.

And I'm going to call myself out as an offender here. My husband Tim and I have a lot of sales in a particular suburb. In fact 3 in the same street in quick succession, so we should know what to expect a house in that street to sell for, right? A house comes on the market with us, almost identical floor plan, the same builder, same age and attributes as one of our other sales, add on the percentage of growth there has been in the intervening period so x+y=z and there is your sale price?? Or is it?

So I had one figure in my mind, my husband and co-agent Tim had another and the sellers had added up their needs and arrived at a third figure. Trick was they needed to expedite the process.

So we went to auction, yes in the quietest time of year if you believe some people, and BOOM! Sold before auction in half the average days on market for $17,500 above what the expert (me) had said and just $2500 short of the seller’s dream price.

So if you are choosing your agent on their sales ranking in the area, understand that’s just a measure of the number of sales not the prices achieved, or if you are tempted to choose an agent based on their opinion on price, STOP IT!

We are experts on past sales, we are not fortune tellers, nor are we licensed valuers.

The saving grace in this case, was that we took price out of the equation – which is sometimes a good thing and sometimes a disaster, depending on how it's handled, but that’s another blog – we marketed the property not the price and let the buyers make their own mind up about value. The buyer knew the market well, was renting locally while deciding what to buy, had a very specific set of requirements, a priority on a particular school precinct, a budget and a time frame – she was playing for keeps!

Had I gone in with my knowledgeable (or opinionated) self and my ego on my sleeve, I would have told those sellers and their lofty price expectation, they needed to rent a copy of the Castle, you know the line right – “Tell them they’re dreaming!” And, I would have suggested they list the house about $7,500 under what it sold for, I was WRONG! Thankfully I've been around long enough to know we agents get price wrong quite often, and it's not our job to dictate to the market, I could have robbed an absolutely lovely couple the chance to achieve a great sale price. Am I alone in that as an agent? Absolutely not, it happens all the time and any honest agent will tell you that. 

So what are the alternatives?

Does a local / area / suburb specific agent have anything to offer?

Yes, speaking for the positive they know the locals, cool – but are they buying? Well some are in fact, the buyer in our previous scenario lived barely 200m from the house we sold, you’d be surprised how commonly that happens. And yes, they have a database of people they spoke to recently who want to buy. However, the reality is that by the time you get back to recent buyers who missed out they most commonly have found something else and are no longer looking.

And the case for the negative, to be fair in today’s digital marketing world every buyer is on Australia’s biggest database it’s called Realestate.com.au. In the southern states Domain.com.au is also popular but here in Queensland and more specifically the Sunshine Coast we don’t get many buyer enquiries at all from Domain. Buyers are on alert systems, emails, searches etc. and they are onto the new listings as quick as a flash, which was the case in our previous scenario.

What is more important local knowledge or marketing skills?

What I believe is missing in today’s real estate market is the human touch. I don’t know about you, but as someone who was a looking at buying a property recently, I found agents didn’t return my calls, didn’t answer my enquiries at all in some cases and days and weeks later in other cases, ticked me off by dodging my questions and signing me up to receive emails from removalists and conveyancers and financial service without answering my enquiry at all (nope not joking – gave my contacts to a third party marketer) and when I said I’d like to inspect the property at a certain time and wasn’t free at the assigned open home timeslot – the response was silence, nothing, still waiting!

The missing ingredients in our opinion are just five; and Tim and I have a shared 57 years selling real estate. We are veterans, so we have given ourselves permission to have an opinion:

  1. Marketing finesse: The ability to craft an intelligent, polished and professional marketing campaign
  2. Customer service: A quick and professional response to enquiries from that golden and much sought after commodity – your buyer. Customer service is the key, answer the phone, respond to the email enquiry, understand that not every buyer wants to attend an open home, some need to make an appointment or have questions they need answered before they come to view a property.
  3. Follow up: So many people attend open homes and then there is no follow up from the agent to ask their level of interest, their feedback on price and what they loved or hated about the home, whether they would like a second inspection, or whether they would like to make an offer.
  4. Feedback: If someone doesn’t want to buy a particular property it is critical that both the agent and the seller understand what the objections were and what they can do to overcome or address the objections. E.g. if it’s a maintenance issue, you can fix it, if it’s a colour scheme, can it be changed and if it’s price it can be discussed and adjusted.
  5. Likability: Now this may seem a strange thing to rate as a success tool for agents, but have you ever met that agent who thought they were a big shot? Who's own need to feed their ego came across and being dismissive, abrupt or rude and left you feeling small when you asked an honest question? As a seller you will be spending a lot of time with your agent, it's important that you like them, it's the same for your buyer a friendly and helpful agent can make a huge impact on the experience for all concerned.

So area expert Vs marketing expert with a focus on customer service?

Hand’s down it’s about the customer experience for both the seller and the buyer, it's about communication and likability, it’s the quality of the marketing, the follow up and the feedback which influence the quality of the result and indeed the price outcome. Does an agent need to be a location specialist to provide those skills? We’ll let you be the judge of that.

 

If you've been thinking about buying or selling your home feel free to contact us for more information at fgregory@sunshinestateagents.com.au or call us on 0431 366 364.


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