Just like other areas of life, there was a recent push to replace experienced real estate agents with “millennials”. The thinking was that millions of home buyers would be people in this age cohort, that they would be THE buyers and that they would want to work with agents who were their peers. Well that wasn’t on target, to put it mildly. Many of the younger buyers are renting and paying off college loans, or even staying at home with Mom and Dad…not buying. Real estate planners shouldn’t feel bad; retail made that mistake too. Many of the millennials are educated, savvy, street smart and skeptical about anybody wanting their sparse cash. They want details, they want to know their agent has a solid knowledge of the market and is well capable of walking them through the jungle of tasks associated with buying and selling a home. In other words, millennials expect to be leaders and as such, their real estate agent had better be qualified to take that lead.
Millennials who do buy are not usually in the higher end market; rather, they are usually in the first time buyer and first time move-up buyer price range. They, and other who ARE buying in the high end market do not want a “millennial” guiding the transaction. Well, I’m a 10,000 foot view person. I saw this stumble coming a mile and a half away. Don’t get me wrong; I love young people. The ones I get to meet and work with are very smart, very motivated and very sensible about buying. They give me hope for the future. But young real estate agents are not well rounded, confident and knowledgable about the market just yet. They deserve to grow and build a skill base, yes; but that doesn’t negate the value of experience.
So some of the same companies who were nudging the older agents aside are now actively recruiting experience. It’s a shame that experienced agents are often overlooked by the ‘planners’ of the future of area market movement, and that that experienced agents are re-noticed only when the cavalry is needed. But that’s how it goes.
My advice to you is this: Realize that you are making one of the largest transactions of your life, and that you should put that transaction in the hands of experience and knowledge. That doesn’t mean someone who made a high score on the test, although that’s important. It means someone who understands the nuances of the market beyond what the publications say. It means someone who understands that prices in neighboring communities can be very different and why. It means someone who has experience with inspectors and builders. It means someone who knows how to spot hidden potential issues. It means someone who knows what’s worth worrying about and what is not. It means knowing the importance of pricing and how it impacts the overall market. It means knowing how to put the most cash in your pocket at the end of the day.
I decided to write about this subject today because I have been working on a market analysis for the last several days, in a new growth-spurt area, where prices have jumped significantly in the last year. I want to push my list price as high as I can…and be able to have it appraise at that value when the time comes. This of course prompted a deep dive into that area and into that community, and a subsequent spreadsheet…mine, not a canned product.
One of the values I use, LOOSELY, I might add, is price per square foot. And while this is the WRONG WRONG WRONG value to use in pricing a home, it does give you a nice snapshot of market activity at-a-glance, and it can be quite eye opening. It was for me. In my area of interest there were 3 of 14 homes I studied, which had VERY much lower sold price-per-square-foot. This prompted me to look at the listing agency AND agent, and each case, the agent was inexperienced. This costed the home owners/sellers a lot of money they could have made on their transactions and it hurt the overall market. These low-ball prices will be put into the “comp” pot, and will be used by appraisers in pricing other homes for mortgages. And this tells me nobody’s guiding these agents appropriately and nobody has told them the value of strong pricing. Nobody has shared with them that listing with strong prices raises the entire market, which is actually our job…to protect the market.
So, while other home sold in the 118.00 price per square foot, these homes sold at around 108. That adds up. To loss for the sellers. The moral of the story is this: If you hire inexperience, it will cost you. You may never know it…which would be the best scenario. If you do know it, you have to wonder where else you got short-changed.
I need to also say that sometimes it pays to price low if a quick sale is needed…for the SELLER, not the agent. And that’s all I will say about that.
Bottom line: Be sure your agent is experienced enough to be a strong, successful advocate for you. That’s what you are paying for. This isn’t an opportunity to be trendy; this is your money at stake. Experienced agents will understand that.