Buying or selling a home is the single largest transaction that most consumers undertake. The process can be filled with uncertainty, emotion and pitfalls, so the vast majority of home buyers and sellers choose to hire a real estate agent to help them through the process. Selecting an agent is obviously an important step, and most consumers would agree that agent expertise and experience should weigh heavily in that choice. The shocking statistic is that the majority of home buyers and sellers select agents who have little or no experience closing real estate transactions.
Experience Matters When Selecting a Real Estate Agent
There is no substitute for agent experience when negotiating and closing a transaction. Our license education is very centered on rules, laws and terminology, and does not address the practical aspects of putting a deal together and successfully managing it through closing. For every 10 transactions that I help close, I am introduced to 10 new situations, with new faces, new points of view and new hurdles to overcome. Just when I thought I have seen everything, a new situation comes my way with something to learn. We become better agents with every deal we successfully close, and the number of deals under our belts should be an important criteria when selecting an agent. What about agents who are new to the industry? Everyone needs to start somewhere, and inexperienced agents are capable of doing a fantastic job, but it is important that they have a training program and an experienced broker and team to back them up as they learn the ropes.
Most Consumers Do Not Select Experienced Real Estate Agents
I decided to delve into the statistics further to better understand agent selection. I took a look at all of the closed transactions from the Northwest MLS in King County for 2009, which seemed a reasonably large sample and time period to analyze. Here is what I found. (Note: Stats are not compiled by the Northwest MLS)
- 8148 agents closed transaction in King County in 2009
- 1339 of those agents (16%) closed 1 transaction during 2009
- 3771 of those agents (46%) closed 3 or fewer transactions during 2009
- 4692 of those agents (58%) closed 5 or fewer transactions during 2009
- Only 1356 agents (16%) closed 12 or more transactions during 2009
Surprised by the data? I certainly was. 58% of agents closed 5 or less deals in 2009, 46% closed 3 or less, and 16% only closed one deal last year. Those are hardly numbers that speak to experience. Heck, if the only transaction you agent closes this year is yours, you have just as much experience as they do! If there is one thing that can be said for our industry, it is that there are loads of hucksters and part-timers out there who fast talk their way into a couple of deals each year. Consumers can do better.
How Many Transactions is Too Many?
A small group of agents closed a very large number of transactions in 2009. The top 25 agents actually closed more than 100 transactions last year. Certainly they have significant transaction experience, but realize that the only way this is physically possible is by working with a substantial team of folks or by sacrificing service. There are only so many hours in each work week, and you need to account for all of the failed transactions that go along with successful ones in this business. If you are planning to work with a very high volume agent, recognize that you will be interacting more with their team than with the agent who is getting credit for the transaction, or you may be sacrificing service levels because your agent is assisting so many customers. You will want to understand who is on the team, and when exactly you will get to work with the main agent, along with getting clarity on the service levels that they provide to you.
Striking a Balance
Consumers should require that their agents demonstrate results. Stick with full-time agents who do this for a living and are closing at least one deal per month, and you’ll be using an agent in the top 16% of all agents in King County. Our own findwell agents consistently rank in the top 10% of agents in King County, and some of us are in the top 5%. We are able to close more deals than a typical agent by focusing 100% of our work on finding homes and closing deals, not on trying to prospect for clients. At the same time, we are not ultra-high volume agents, to make sure that our customers do not have to sacrifice service to obtain our expertise. Consumers should be more diligent when selecting their real estate agent and make sure that they select agents who have substantial experience getting deals done.