Buyer Diaries: The Pregame

As some of you know, I’ve recently moved from New Jersey to Texas, because my wife got one of them “once-in-a-lifetime” opportunities to join a fledgling company at the ground level. I’ve been thinking and writing about real estate for a few years now, but haven’t really had the chance to look at the experience of being a home buyer. I do not think I’m representative — in fact, far from it. I know too much. But at the same time, I thought it would be interesting to do a series of “diaries” on my experience as an average joe, regular home buyer in this market, with the technology that is available to me as a run-of-the-mill consumer.

This post is about the pre-game.

Touch of Background

My family did the Great Migration from the high-tax, high-regulation, high-cost enclaves of the Northeast to Houston, Texas just after Christmas of 2010. Since I’m not part of any large corporation with Relocation deals, I didn’t go through any of those networks. I wish I had, so I can comment on what that experience is like.

Nonetheless, we elected to rent for a while, as we really didn’t know that much about Houston. Frankly, I don’t understand relos who buy. How the hell do you know you’d like the neighborhood? How do you know you won’t find some key info you didn’t know once you’ve moved in?

Furthermore, once we settled in, we elected not to get serious about a home search until we knew what was happening with our NJ property. If that sold, then we’d get in the market. If it didn’t, then we were in no rush.

So we’ve been here for about four months, learning the lay of the land, getting adjusted to life in Houston, and staying busy with our charity — The Hahn Foundation for Youth Education, Entertainment & Enrichment — when our NJ property was sold. The pregame began, however, when we went under contract. We figured it was time to start doing what buyers would be doing at the “I now have an interest” phase.

The Initial Search

You know how the industry buzzes about “Lifestyle Search” from time to time? And back when I was with Onboard, I did a bunch of writing on Lifestyle Search? Well, it’s a very real phenomenon. Here’s how it worked in our case.

First delimiter: commute to work. I don’t commute, of course, but my wife does. Her office is located just inside what’s known as the “Outer Loop” of Houston, in an area known as Harwin. It’s a couple of blocks off of a major thoroughfare in Houston called Highway 59 that runs basically southwest from near city center. We didn’t know a heck of a lot about traffic and commuting in Houston, but given that my wife’s commute for the past ten years or so were on public transit, minimizing driving time was the first priority.

Second delimiter: good elementary schools. As all parents of little ones would be, just after commuting was “good schools”. When we first moved here, we really had no idea what to expect.

Third delimiter: “good” neighborhood. I put that word in quotes because what’s “good” for us may not be “good” for other people. This was a highly subjective thing.

So what does a consumer do when confronted with these questions? If you said, “They call a REALTOR”… BZZZT, I’m sorry, thank you for playing, please return to your seat, Contestant #1. If you said, “They take to the Interwebz and start doing all sorts of Googling,” then you’re partially correct. We did do just that, but honestly, there really isn’t a great resource on the Web for this sort of thing. You have various websites, places like City Data, Wikipedia entries, and the like, but at this stage, I discounted every site that I felt would have a bias. Yes, that means “hyperlocal websites” written by real estate agents. Again, maybe it’s because I know too much, but I knew there was no chance that I’d find a realtor hyperlocal site that would say something like, “Here are the communities to choose, in order of preference, and the ones to avoid.”  That sort of thing is likely against the law anyhow.

Turns out, what consumers do (I think) is what I did: call a friend. I called a college friend who lives in Houston and spent an hour or so on the phone just asking questions about neighborhoods, about the city, about what to look for, what to avoid, etc. He gave me a great download of all sorts of background information. The most important was that living inside Houston city limits has major advantages, but that you really had to check street-by-street, neighborhood-by-neighborhood, since Houston has no zoning.

Nugget of Wisdom: Had my friend’s agent done a better job with him, and had been more memorable to him, that initial point would have been the perfect one for “lead generation”. He very easily could have said something like, “You know, Rob, the woman that helped us was really great; you should give her a call.” And I would have done just that.

After talking to friends, after some amount of web-based research, we chose Sugar Land, TX, a suburb just outside of Houston, because of the commute. We figured that once we landed there, we could undertake a wider search, get to know the various areas, various communities, and make a permanent decision at that point.

After the Beachhead

Turns out, behavior changes rather dramatically once you make a beachhead landing. You cannot underestimate the power of Sloth. Once we got used to Sugar Land, inertia very much dictated that we stay in or near Sugar Land. We would have to be pretty unhappy with the area to think about moving to a totally new area, like Katy or inside the Loop. We already knew where the stores were, how long it took to drive the kids to school, how long the commute took, etc. To change all of that dramatically is hard work, and people naturally avoid hard work they don’t have to do.

Furthermore, once you’re “onsite” as it were, you start to learn the things that locals know. You start to get a sense of different developments and subdivisions, and the advantages and disadvantages to them. You start learning traffic patterns, which dictates quite a bit of suburban living in a driving city like Houston. You start to get familiar with where to take the kids on weekends. All of that naturally turns attention and intention “inwards” towards the immediate neighborhood and surrounding areas.

Since we happened to like Sugar Land — and if you clicked on the link above, you can see why — when it came time to think about permanent home, we focused our search here.

Here’s where my experience diverges significantly from the “average” consumer, I think. I don’t have a fear of, distrust of, or hatred of real estate agents. If anything, I have a very good idea of how valuable a good real estate agent can be in the search process.

Practically, what this means is that I tried out the various consumer search sites: Realtor.com, Zillow, Trulia, and HAR.com (which is huge here in Houston). I wasn’t thrilled with any of them. I won’t get into all that many specifics, because the larger point is that not one of these tools actually saved me time and effort, and I knew that. What would save me time and effort is being able to list all of the various scenarios and criteria we have — most of which are very unfriendly to computer algorithms, as they are not binary decisions (e.g., “does the house have a swimming pool? Yes/No?”) but multi-factor balancing acts (e.g., “this school district vs. that one vs. commute time vs. price vs. community features vs. total cost of ownership vs. etc. etc. etc.”) — and have a “system” send us suggestions.

I knew from my years in the industry that there was only one such search engine: an experienced real estate agent who would do more than just put the base binary queries into the MLS emailer program and put me on a “drip” campaign. It’s an expensive search engine, because despite all the standard chatter about how the seller pays for everything, intelligent buyers recognize that the price of the house includes transaction costs, such as paying buyer agents their split. My point is that I’m willing to pay that, but I want more than something I could get out of a computer program.

(The day that some smart entrepreneur invents a truly “fuzzy logic” expert system that could replace the multivariate balancing act that a human being would do is the day that all real estate agents would lose their jobs. I don’t see that happening until sometime after Skynet attains self-awareness, at which point finding real estate will be the least of my concerns.)

I used existing tools, such as HAR.com (which does have a really wonderful school information tool), to narrow the criteria down a little bit, and resolved to find a real estate agent as the first step in the actual property search.

How to find this real estate agent?

Total Lack of Tools for Finding a Real Estate Agent

And here we come to the first major failing of the real estate industry. There is absolutely nothing available to consumers to help them find an experienced, ethical, hardworking real estate agent.

You know all those “Find a Realtor” links on virtually every web portal, brokerage site, and consumer-facing website? Totally useless. Almost all of them amount to a list of names, photos, and contact information. How a consumer is supposed to know who to call from that is beyond me. When HAR.com tried to put agent performance data on its website a while back, despite support from some corners, it was smacked down quite hard. Voluntary agent reviews and ratings are moderately useful, except that they are marred by a whole litany of issues, such as virtually every review being a positive, glowing one, and consumers not really having enough experience to be able to judge in any event.

Promises are no help at all, since every single brokerage, every agent, claims the exact same thing and charges the exact same price. Every agent is a local expert, hardworking, totally dedicated to client service, and goes the extra mile. Well, if everyone is going the extra mile, doesn’t that mean no one is going the extra mile, since “extra” implies something other people won’t do? And we can just acknowledge that brokerage brands are completely meaningless to a consumer; I know I paid zero attention to it in my home search pregame process.

What that leaves, then, is good old word of mouth. I happen to be lucky enough to know some of the top agents in the country, one of whom was my listing agent. Like most consumers who had a good experience with an agent would do, I called Sue Adler and asked who she would recommend. She looked into the matter, and recommended Blayne and Amy Vackar.

Nugget of Wisdom: Quite a few real estate agents talk about how they’re looking to reach the consumer, not play Twitter games with other realtors. There’s quite a bit of truth to a lot of social media stuff being fluff, but to the extent that you have an extensive network of other quality agents, your value rises in the eyes of the consumer. This might actually be one of the most important benefits that a national franchise provides. And I’m thinking now that the lack of these inside-industry connections is one of the things that hurts the part-timers the most; they have time to service clients, but not enough time to network with other agents.

Desperation Is A Turnoff

Getting a name and a phone number is a far different thing than actually deciding to work with that agent. I contacted Blayne, we exchanged a couple of emails, text messages, and a phone call or two. I ask my various questions — almost none of which you are likely to get from the average consumer who doesn’t know a thing about real estate — and Blayne answers them. The details are relatively uninteresting.

Here’s one, however, that is. From the start, Blayne insisted on meeting in person before we started working together. He wanted the two of them (Blayne and Amy are a husband-and-wife team) to meet with me and my wife, to see if there’s a fit. He didn’t immediately put me on some drip campaign, didn’t put me on a newsletter, and wasn’t obviously obsequious.

Different consumers react differently, of course, and some people might just want a realtor who is so hungry and so desperate for a deal that she would jump through hoops, call every fifteen minutes, or whatever. I do not. I wanted a professional who was going to do more than the bare minimum, who would actually act as my “search engine”, know his shit about both the market and the properties, do additional research if that as required, and be able to balance all of the various factors, and render advice without undue consideration of his own financial gain. So I wanted someone who wasn’t that desperate to get another client.

So we meet for lunch last Saturday. We hit it off. I particularly liked the fact that both of them were dressed casually. It was a hot sunny day in Houston, over 90 degrees. Blayne came in shorts and flip-flops. Amy came in comfortable clothes. They weren’t that concerned about presenting the “professional image” with a suit and tie or whatever. Again, some people might look at that and raise an eyebrow. I did not, and importantly, I did not because if they had shown up looking like a couple of attorneys in that weather on a Saturday, I would have thought they were pretty desperate to impress me, which likely would have made me wonder why they’re so desperate, and jumpt to conclusions about their abilities as a real estate agent.

Unfair? Sure it is. But I do think this is how some buyer’s minds work. Take from that what you will.

Preseason is Over

This pregame, preseason diary concludes here, with my wife and I hitting it off with Blayne and Amy, spending the next few hours with them looking at houses, and getting into the nitty-gritty of finding a home in today’s environment. I may have to ask Blayne what he did to find places for us back at his office, since my approach now is, “I ain’t searchin’ for nothin’ — I got someone to do that for me.”

Tune in for the next installment, when we delve into the fun and curious world of talking to new home builders, and my obsession with Green buildings.

-rsh