Whether you are looking to buy a home or thinking of selling, the inevitable question of who to hire as your agent will be top of mind. I’ll explain 3 different scenarios below and show you why hiring a neighbourhood specialist is the way to go.
Hiring a Friend or Family Member
It may seem like the obvious thing to do because you believe this person will tell you the truth and look after your best interests. Also, it feels more comfortable working with an agent that you know versus hiring a complete stranger. But there are big drawbacks to working with a friend. First, the agent who is close to the client may not feel comfortable delivering hard, cold facts because it could damage the relationship. If for instance, the seller client wants to price their home too high, the agent may feel that they should go along instead of trying to convince the friend that it is a bad strategy which could hurt their bottom line in the end. See The Price of Overpricing Your Home.
Second, clients may feel awkward telling a family friend that they are not happy with their services. It’s hard to fire a friend! If your agent is under-performing, it is easier to end the relationship or have a serious discussion about your dissatisfaction if the person is a professional you have hired – and not your aunt or cousin.
Finally, it can be difficult to disclose your full financial situation to a friend or family member. Your agent will likely see some personal financial information and it may be easier to do that with someone who will not be judging you and who is bound by the ethical duty of Confidentiality. See Agency Relationship in Real Estate Transactions.
Hiring an Agent Because They Have the Most Listings in a Neighbourhood
Ask a Discount Agent: How will you market my property?
Again, this may seem like the right thing to do. But it is not a good way to select a professional. Just because someone has a lot of listings in a neighbourhood, it does not make them a specialist.
Spend some time finding out what the agent does after the Buyer’s Agreement or Listing Documents are signed. As a buyer, will you get proactive communication from your agent about properties or will you simply be put on an automated list and expected to contact your agent every time you want to view a property? As a seller, will you receive timely feedback after Open Houses and showings or will you have to call your agent’s office only to speak with their assistant who doesn’t know anything about your house?
There are a lot of agents out there who get listings because they discount their fees. Discount agents often do this because they have nothing else to offer their client. In this case you may find that the saying “You get what you pay for” is true – your discount agent may have no marketing skills at all and all you will get is an MLS listing and a For Sale sign on your lawn. In this increasingly more challenging market, you need more than that to move a property.
Hiring an Agent Not From The Area
No matter how experienced or competent an agent is, working with someone who does not have intimate knowledge of a neighbourhood can potentially hurt a buyer. There are crucial pieces of information that a neighbourhood specialist would know, and an agent who is not from the area may not.
Here are a few examples:
- The history of certain neighborhood homes including who owned them and when
- What makes some homes on a street worth more than others
- Which streets are considered desirable and which are not
- Neighborhood nuisances and their influence on value
- How to accurately price homes and determine specific values
- Which agents take listings at market and who takes overpriced listings
- Listing agent’s reputations and how to negotiate with certain agents
- Upcoming new inventory that is not yet on the market
Buyers should be getting complete disclosure from their agent, but only a neighbourhood specialist can provide some of the crucial information needed to make a smart home buying decision. Sellers on the other hand, are looking for maximum exposure for their home. Can an agent who is not from the area provide this? Not likely since they don’t have the same connections in the area as a neighbourhood specialist. In addition to exposure, you can be more confident in the pricing strategy of an agent who works the area.
In the end, no matter who you choose to represent your interests, make sure you are comfortable with that person. It should feel easy to give honest feedback – about a property or about their performance – to the person you are working with.
If you are looking to buy a home, or are thinking of selling yours, I would be glad to represent you and help you negotiate the best deal. Please contact me at steve@stevewalsh.ca.
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