Look for knowledge and problem solving ability; not time on the job

“Experience is something you don't get until just after you need it.” – Steven Wright

I like that little saying that I saw on a blog somewhere. A corollary might well be, “Knowledge is something that you don’t get until after an experience.”   In real estate this is particularly true. The barrier to entry into the real estate business is relatively low. Just about anyone with a few hundred bucks and the ability to learn and be tested can get a real estate license. That and a few bucks more will get you a coffee at Starbucks, but you still won’t be a Realtor®.

Realtors work within a proven system. The most important component of the system is the brokerage, which is responsible for taking the newly minted real estate agent and turning him/her into a Realtor.  Of course there is also the local Multi-List Service, the local Realtor Association, perhaps a state association and the National Association of Realtors. All of these groups provide bits and pieces of the system that the Realtor must learn to work within. That is a part of the experience that the beginner gets, which hopefully starts the process of the accumulation of knowledge.

Good brokerages will have extensive training programs and perhaps a mentoring program that pairs the newbie with an experienced agent. The broker himself (or more likely the local office manager in larger, multi-office brokerages) will be responsible for the training of the new agent and for monitoring his/her work through their first few real estate transactions. The broker (or manager) serves as both a manager and counselor during this start-up phase. Most brokers and managers have years and years of experience and tons of knowledge about the real estate process.

One can often tell very quickly how successful the new agent will be by watching how he/she uses this important resource. Those who fail and leave the business are most often those who try to go it on their own and don’t leverage the resources of their office to help them over the start-up hump. Many of them get into deep trouble by not asking for help. Conversely, those who cling too tightly to this help and are afraid to try things on their own are also doomed to failure or a career of mediocrity. One must be able to wean oneself from the security of never making a decision on one’s own. A real estate agent is an independent contractor, after all, and must eventually become independent.

A key to turning the experiences that one has into knowledge is the ability to stop and look back over the experience to see what one can learn from it. Maybe the knowledge gleaned is “I’ll never do that again” or perhaps it is. “OK, I see what I did wrong and how to avoid that problem in the future or work around it if I hit it again.” Both are correct, but the latter is more valuable knowledge because it contains the thought process of learning from the experience and not just avoiding similar situations.

There is something to be said for seeking out an experienced Realtor, but if you happened to encounter a relatively new agent that you otherwise think is a nice person; ask them how they get help within their office and perhaps ask to meet with their manager or broker. Let that manager know that you expect that they will be assisting the new agent with any issues that come up during your client relationship and see what they say. A new agent will be eager to please you and probably work very hard; you just need to be sure that they understand how to work within the support system that they have around them to get help when they need it.

A final note is that time on the job alone does not assure that the person putting in the time has gained the knowledge that they should have from the experiences that they’ve had. I’ve met way too many “experienced” agents who still did not fully understand the process or have the ability to work through issues. Many times, one agent or the other in the normal scenario where there are two agents involved (a seller’s agent and a buyer’s agent) will have to take on tasks for both sides in order to get the deal closed; even if both sides are represented by “experienced agents.” Just because an agent can say, “I’ve been in the business for 10-15-20 years”, doesn’t necessarily mean that they’ve accumulated a lot of knowledge during that time or that they can handle situations that may come up well.

Unfortunately there isn’t any easy way that you can really test the knowledge base and problem solving ability of agents whom you might interview before signing up with them. An in-depth interview that focuses more on how they do business than just how long they’ve been in the business or how many transactions they closed last year is probably the best thing. Asking to talk to 1-2 past clients might also help (assuming that you aren’t the first client) or reading their reviews from past clients, if the company does that sort of thing. You can also ask questions like; “What was your toughest sale/client and how did you handle that?” You should then listen for their problem solving approach and their honesty about the situation and how they handled it. They should be sharing the knowledge that they gleaned from that experience.

Things your Realtor doesn't want to hear...

There are lots of old jokes about things you don’t want to hear; like, “Oops!” when you’re lying there awake on the brain surgery operating table or, if you’re on an ocean crossing flight: “This is your Captain speaking, I just wanted to take this time to remind you that your seat cushions can be used as floatation devices…”

The real estate process, no matter whether it’s on the buyer or seller side of the sale, is a cooperative process between the client and the Realtor. There are things that both sides need to do, in order for the process to work well. There are also things that I’m sure neither side wishes to hear from the other.

As a buyer or a seller, I’m relatively sure that you don’t really want to hear, “I just got my license last week and I’m so excited to have you as my first client.” It’s not that there’s anything wrong with the Realtor or with being their first client; in fact they work harder for you as a result and most Realtors belong to organizations that provide them with support and counsel as they get started. It’s just that you had probably hoped for a more experienced Realtor to handle your search or sale. There are other things that an experienced Realtor might say that you also may not want to hear, like, “Your expectations for what you can get for this place are way out of line with the market.”  Sometimes that’s true and the agent will just feel like you need a cold dose of truth about value, in order not to waste a lot of time on the market with an overpriced house.

On the flip side, there are things that clients can say that make a Realtor cringe (inside if not so you could notice). One of the most often heard comments from would-be buyers that can give a Realtor a chill is the phrase, “I’ll know it when I see it.” That just tells the Realtor that the buyer doesn’t really have any firm ideas about what they want. Buyers would be well

advised to take the time before meeting with a Realtor to make a list of must-haves and want-to-have items for their search. They should also have already met with a mortgage rep and have a mortgage pre-approval in hand to guide them (and the Realtor) on the price range that they can afford. The Realtor will normally want to discuss the buyer’s needs and desires before starting any search effort. As the search goes on, the Realtor will be constantly adjusting the list, as he/she gets experience with what works or doesn’t work for the buyer on each visit.

“I’m not in any hurry”, is another scary statement to make to a Realtor. It’s not that the Realtor wants you to hurry; however, the Realtor’s time has value and he/she can’t afford to waste a lot with a client that really doesn’t have any firm motivation to make offers or to buy. Realtors would much prefer a client(s) who has a lease deadline approaching or who have finally tired of living in the same bedroom that they were in when they left for college or young couples living in the basement of one of the parents. You don’t have to be in a hurry and I won’t try to hurry you; but, the Realtor does need to have a sense that you are ready and motivated to buy.

On the sell-side, there are a few statements that indicate that the Realtor is going to have to work hard to make the sale happen. “I’m not going to give it away,” is a favorite; as is, “It was good enough for me for 30 years, and it ought to be good enough for a buyer.” The Realtor is not asking you to give your home away; just to be reasonable about its worth on the current market. That is why the Realtor did the market analysis and gave you pricing advice in the first place. And that 30-year old roof or furnace or whatever, that is on its last legs is certainly not going to slip by the inspection and be good enough for a buyer. The buyer will either discount the offer price or ask for a concession to have those items replaced. That’s why the Realtor’s suggested price may have been lower than you expected in the first place. He/she was already factoring that in to the market value.

Another seller statement that portends problems for the Realtor is, “Let’s test the market at this price.” That usually means that the price is too high and that the house will set on the market until it gets stale. Many times it will end up selling for less than what the Realtor originally had in mind, because it sets there too long and people start to think that something in wrong with it. Another oft heard statement from sellers is, “My sister (brother, cousin, friend) is a Realtor in another state and she told me that my house should be worth $XXXXXX.” No one, including another Realtor, should ever try to advise someone about real estate pricing in another state. It’s not really possible for them to know the local market. Good Realtors, even if they are in other parts of the same state, will usually avoid giving pricing advice about properties out of their area of expertise. 

Buyers can also drive Realtors crazy with this statement, “Let’s toss this low-ball offer in to see how serious (or desperate) the seller really is.” Buyers are often surprised when they get a rejection and not a counter-offer. Low-ball offers just offend sellers and often they will not entertain future, more serious offers from the same buyers. If you like the house, make a reasonable offer, based upon advice from your Realtor. Lobing in low-ball offers is a waste of everyone’s time.

Buyers and sellers often use this line, “I’ve bought and sold lots of house, so I know real estate.” Really, how nice for you. It’s great that you’ve had some experience with the real estate process. Hopefully, that means that the Realtor won’t have to teach you everything about the process; however, each transaction stands alone in terms of the property’s location and condition and the condition of the market at the time of the sale. Your real estate experience should tell you to do your part to make the house marketable and then step aside and let the Realtor do his/her job to market it.

The Realtor will be happy when he/she hears, “You’re the expert; I’m going to take your advice.” I think you both will be happy with the results.

Searching for contentment...

“Be content with your lot; one cannot be first in everything.” (Aesop) from the Jack’s Winning Words Blog. Jack posted this the day after the Tigers had lost to the Twins for the Division title. I suppose it had better meaning for that occasion. The Tigers did have a very good season and posted an enviable record for the year; however, that is scant consolation for their loss in what was a great baseball game.

In life and in real estate this is a tricky phrase to properly position. There is value in being able to be content with what one has in life, yet one cannot help but to keep striving to be first in everything that one tries. Winning certainly isn’t everything, but trying to win is important. In many peewee sports the participants are told initially that winning isn’t the goal of participating. The goal at that level is to learn how to play the game. Yet at each match, game or event, you’ll see and hear the coaches and parents urging on the kids to win. It’s human nature. If the parents, coaches and kids of the losing team can be content with the fact that the loss was a learning experience, then so much the better.

In real estate, one must deal with the relatively high probability of a loss - a property that doesn’t sell and goes to some other agent, a listing appointment that doesn’t go your way and goes to some other agent, a sale that goes south and can’t be saved, an offer that is rejected and cannot be turned around. Fortunately there are also many chances for wins and lots of things to be content about. I suppose that I would really be a malcontent, if I worried all the time about being number one in my market.

There are agents who have been Realtors for 20-30-40 years in my market. There are large, multi-person teams in the market that I serve. I could work 24 hours a day, 7-days a week (i.e. a few more hours than I currently work) and never catch those agents. So I have to be content with what I can achieve. I’ve set my goals at a reasonable number of listings and sales per year and I’m working hard to meet those goals. Meeting them won’t make me number one in my market, but maybe it would help me be more content.

Still, I can strive every year to maybe move up a notch in the local pecking order. I can celebrate small victories, like my local Web sites coming up higher in Google searches than some of those big guys. I can find happiness in being found on the Internet and getting out of state calls because of my Web presence. Like a peewee player, I’m still learning this game (after “only” 8 years in the business), so I try to learn from my mistakes and losses and get better out of every defeat – and maybe that is a victory in itself.

And then my phone rang…

I just got back from a short “vacation” of sorts. We went over to Chicago to visit some old fraternity brothers and then on up into Wisconsin and across the UP and down the state to home - inadvertently doing “The Circle Tour” around Lake Michigan. I say it was a vacation of sorts because I never really got away from business.

On the drive over to Chicago I was on the phone at least 5 times discussing various deals that are in progress and instructing people what to do. Friday night we went out to dinner with the friends that we were visiting and then the phone rang. Saturday night, when we got to the home of the friends, the phone rang (I finally turned it off that night). Sunday we went to the Circus museum in Barabo, Wisconsin and the phone rang. Monday we toured Door Country, Wisconsin on the peninsula across from Green Bay and then the phone rang. Tuesday we decided to head home and I had 4-5 more conversations on the drive home.

Real estate is a 7 day-a –week job and there is little provision for taking time off, even if you have someone “covering” for you. The needs of the clients and the decisions that keep coming up in deals often can’t be satisfied by someone who has volunteered to watch things for a realtor. In addition to the phone, I was in daily email contact (really twice a day) the whole trip too and had to make sure that every hotel had Internet access. To a larger extent it was as if I’d never left home.

My long-suffering wife is a saint about putting up with what she knows will happen when we travel; however, I’m starting to question whether it is really worth it to try to keep up with the business while also trying to relax a bit and enjoy a vacation. It was perhaps a poor choice of timing for this trip, since I have 4 deals in process right now; but the timing was dictated by the schedule of one of the participants in Chicago, who came into country from England for a visit and who really was the reason for the get together. The next vacation will hopefully be better timed to a lull in my business.

I’m going to try again in the winter to just take off and enjoy some time away from the business. I’ve been in other businesses over my lifetime and none were as hard to get away from as real estate. Perhaps it’s just me and how seriously I take my responsibilities and obligations to my clients. I certainly have hit other Realtors with much less concern about the needs of their clients or the timeliness of decisions in deals. Intellectually I know that the world will not end if I do not answer that ringing phone; however, it might be important and it certainly seems important to whomever is placing the call. I could just turn the phone off and check it once or twice a day for messages and maybe just check email once a day. Oh, excuse me, my phone is ringing…got to go.