The Power of Reputation

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The real estate industry is interesting.

One way it is interesting is that each agent, with each company is actually competing with each other for the same business. If a home-buyer is looking to buy a home and meets three real estate agents from the same office of the same company, they are handled the same way as though they met three agents from three separate companies. Each agent wants that business and is competing for that business.

Realtors and real estate agents are independant contractors, so each have their own business and do things a bit differently than the others.

And although we are competing with each other, we have to cooperate with each other, and even pay each other, to facilitate transactions. So I might meet a young couple at an open house and walk them through the home and feel pretty good about them and think they feel pretty good about me. I might ask them if they would like to meet me tomorrow morning at my office to go over their needs so I can help them find a home and have them agree to meet me. I might then get a call later that evening from an agent in my office saying they have an offer for me on a home I have listed down the street from the one I held open and when I get the contract see that the buyers are the young couple I had met earlier at my open house.  Now, not only do I not get the sale, but I now will be paying another agent to represent the buyers that I thought I would be representing. That’s interesting…

So while we, as Realtors, are in the business of competition and cooperation, or co-opetition, the way we do business can have a major impact on our client’s success.

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“All things being equal, agents will choose to show or not show homes based on who has it listed.”

There are some agents in my market that I know are unscrupulous. There are agents that I know are liars and will say and do almost anything to get business and I know that working with them means a transaction full of deception and non-disclosed items and problems. There are agents that I know do not care about their clients at all, but instead care only about their own gain.

And there are many agents that I know who are very good people and care very much about their clients and also care about each transaction being a win for everyone. Some agents work very hard and make sure that everything goes smoothly. Dates are met and everything is disclosed and they are always a pleasure to work with.

There are agents who I know usually under-price their listings, so I know that it may be worth showing if for no other reason than because my buyers will probably get a good deal (even if that means their sellers lose money). There are some agents that I know their assistants more than them because that’s who I deal with when I sell one of their homes.

And I also have judgements about some companies because of the experiences I have had with their agents, or because I know they hire so many new people and often have complications in the deals, or because I know the broker is a jerk and can not be reached and if there is a problem it’s going to be fight because of the broker. That deosn’t mean I don’t ever show that companies listings, but it does effect which homes I may show first.

And I also know of some agents that put homes on the MLS and that’s all they do. So I know if my clients buy that house I’m going to end up doing the work on both sides. And that puts me in a horrible situation because I only represent my buyers, but if disclosures aren’t filled out properly and the other agent is not helping the sellers, what do I do? Do I allow my clients to buy a home without the necessary disclosures? No way! So I need to make sure the sellers fill the disclosures out properly, but I can’t advise them or imply agency. This is sticky and can potentially open me up to liability.

So, if I have a buyer who is looking for a four bedroom rambler in South Jordan with a three car garage and vaulted ceilings, along with some other details, and I do a search on the MLS and find that there are 47 homes that meet that criteria, which ones do I show first?Obviously I cannot show them 47 homes in one day. I can usually show about 10-12 homes in a day, depending on how much time my clients want to spend in each home, and how far apart the homes are and what time of day we are looking (rush hour traffic) and whether we are driving together or if they are following me because they have a car full of kids (which takes even longer).  So, I’ll go through the list and pull out the top ten homes to show them. And I will base these top ten on if they have virtual tours where I can see that they are homes my buyers will like, whether the homes have some upgrades or features that may be appealing to my buyers, and sometimes I will choose because I know the agent and like the agent and I know the transaction will be a good experience if my clients buy that home.

Obviously if my clients don’t like any of the first ten, I’ll show them the next best ten, and then the next, and so on. Sometimes I need to show them every house on the market, including the homes listed by agents I don’t like. And sometimes the buyers still won’t find what they are looking for and so we just have to keep looking at every new home as they come on the market. But many times my clients find the right home in those first ten.

So the sellers of those homes benefited from listing with an agent who has a good reputation.

All things being equal, agents will choose to show or not show homes based on who has it listed. If it is an agent they know and like they will want to show that home. If the agent is someone they know is dishonest, or it is a “limited services” listing, where the buyers agent has to do a lot of the work for the sellers, many times agents will not want to show those listings first, or at all.

I don’t like showing homes that are “limited services”. I don’t like it at all. I would prefer to never have to show one of these listings again and I would prefer that none of the agens in my company ever have to show one of these listings again. I know that we eventually will, but it would be great if these listings were not around. And I know that sellers who list their homes with agents who offer “limited services” listings are losing out on many showings. I know that many agents won’t want to show those homes, or at least they won’t show them first, which sometimes is the same thing.

If I have a home listed and we receive multiple offers and I know one or more of the agents I’ll always tell my clients what I know about them or what my experience working with them has been, so my clients can use that information as part of their decision on which offers to respond to or accept.

Reputation within the real estate community is very important because reputation tells our story. It is important to work well with other agents and to care about getting things done efficiently. And it is important to make friends with agents at other companies and to care about them and their success also.

There is plenty of business to go around, and there are a lot of different business models and brokers and cultures and there is no one right or wrong place to work. But our reputation is important no matter which company we work with, and for the sake of our home buyers and sellers some of us make that a part of our business plan.

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19 thoughts on “The Power of Reputation

  1. I very vividly remember one of my early RE teachers talking about agents that “overprice list” themselves out of the business. They take enough listings that are stupidly overpriced just to hope to drum up other buyer clients or whatever. Unfortunately they tag themselves as willing to take overpriced listings. After a while buyer agents get wise, and start shuffling that agents listings towards the bottom of the “lets go to see” order. Plus that agent attracts yet more clients that want their listings overpriced, while at the same time failing to get to enough closings to stay in the business.

    Repuation is as you say,quite important.

  2. A couple of comments.

    1. I retired from Delta Airlines this summer after 33 years with them and moved from SLC to San Ramon, CA to work with my brother and his wife in real estate. Stumbled across your blog abouta week ago and subscribed as it is nice to read input from your neck of the woods.

    2. I just started a blog to journal on my change of careers and wrote something but which you speak. I have not had enough pesonal experience in real estate yet to have personal history with what you address. But, people are people and you see this type of thing showing up everywhere.

    It amazes me that in this day and age of instant exposure that people think they can still hide who they really are. I just read something the other day – “Honesty (integrity) is the gift you give yourself.”

    3. A question – If you could change one thing in this industry – what would it be?

    John Harper
    https://sanramon.wordpress.com/

  3. The beauty of this business is the impact we have before, during and after a transaction has occured. In the end, if we (as agents) do what is best for our clients, they win, we win and the clients that we get down road via referral will win.

    Our reputation is collective. The Realtor code of ethics should be taken very seriously. The bad apples usually are not in this business very long and the good one’s continue to grow their business.

    My question: Is it unethical to avoid limited service listings or those agent listings that we know are unscupuless?

  4. John,

    I’m sure you’re loving it out in San Ramon- beautiful area. I used to live in Danville and I absolutely loved it out there. The whole town was like a big country club with green everywhere and beautiful rolling hills.
    To answer your question, if I could change one thing in the industry. This is a tough question. Tough because there are a few things that I would like to change that would make a huge impact. I suppose the one thing that would make the most difference that I would want to change would be the licensing requirements. This is a topic that I am writing a post about- just haven’t finished it yet.

    Doug,

    To answer your question- It could be unethical to avoid showing an agent or company’s listings all together. What I am talking about is deciding on which homes to show first. If I did a home search for a buyer and three homes come up that meet their criteria then obviously I need to show them all three homes. But if my clients are looking for something that is not so hard to find and there are forty homes that meet their criteria. I need to choose which of those forty comparable homes to show them first. And I will/do take into account limited services listings and what I know about the agent, absolutely. And I know that many agents will not show any limited services listings or show any listings by agents or even company’s they don’t like. I am not saying that it is right, or what my judgement is about that- I am simply saying that in the real world, it is the reality. People talk about this sort of thing in casual conversation, not on a blog where they are identified and accountable for what they say, but they do discuss it. And wouldn’t it be just as unethical to NOT tell a client about an unscrupulous agent on the other side so they can at decide whether or not to take that into consideration?

    It’s like showing homes that are For Sale By Owner- most agents would never show a FSBO home unless they absolutely could not find a listed property for their clients and the current market inventory was very low. In most cases, FSBO sellers need to list because otherwise all the good buyers, who almost always work with an agent, won’t see their home otherwise. Is that right? Is that ethical? Considering most properties are listed and usually buyers find what they are looking for within the listed inventory…? Maybe, maybe not… but it’s the reality.

  5. In our buyer rep agreements our fee expectted from the commission split is stated as 3%. That is allowed to be forgiven to a 2.5% split in the case of a 5% listing. Less than that and my buyers are required to make up the difference and/or structure it into the offer, so it is a factor for them what the co-broke is.

    The co-broke just seems to be best thought and spoken of as a bounty for bringing in a buyer.

    FSBO’s are typically last on the list of things to view simply because they aren’t on the MLS and are essentially invisible unless one is on your driving route. Really – buying agents just use the MLS. If thats a total failure then we start looking at newspapers or internet.

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  8. Bravo, Greg! And to Doug, the “cooperating” agent absolutely is a factor in our business. If I have had a particularly awful experience with an agent in the past, it is not unethical to warn my clients. It is in fact my obligation, as there are just some agents that I know are going to create problems during the transaction. At least that way, I have gone on record, and my clients chose to proceed eyes-wide-open.

  9. greg – “Realtors and real estate agents are independant contractors, so each have their own business and do things a bit differently than the others.”

    so true. you are the brand. a customer or client selects the person, i think, before the company. it’s the personality, reputation, knowledge, skill and likability that you bring to the table. it’s a people business. if they like you, they like you, if they don’t, it doesn’t matter what company you work for.

    keep up the great job greg. utah is lucky to have you.

    -rudy.sellsius°

  10. ‘Reputation within the real estate community is very important…’
    Wonderful piece, so true.
    Whether they’re a – liar, slacker, unscrupulous, a hard-ass, just don’t give a damn, or don’t have a clue – you’ve got a hard road to hoe trying to keep a deal together with these agents, and everything’s in jeopardy for your clients and you.

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  17. When it comes to choosing which homes to show to prospective buyers, most agents use the same criteria that you mentioned – they just don’t admit it.

    Whether the home is a good fit for a buyer is just one of the criteria, commission and hassle factors are also a big, but not mentioned component.

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