It’s been a while since posting, because I’m in the process of some big design changes here and elsewhere. Plus, life on the road — you know the deal….
But I wanted to drop this quick post, which is really more of a set of questions to you, the best informed readers in the industry. It’s interesting and all kinds of (potentially) controversial. I love both interesting and the controversial, so… here we go.
In my last Industry Relations podcast, with Greg(s) Robertson and Fischer, I brought up a point that got me wondering. The episode is embedded below.
The point is around the 29 minute mark and it is this:
What pisses off brokers and agents about portals like Zillow is that they resent a buyer agent who doesn’t know the area/neighborhood/building being able to buy leads from the portals for properties in that area.
The most prominent example with this Streeteasy deal was Ryan Serhant, the star of Millionaire Real Estate Agent, who posted this on Instagram:
This is about the seller whose single largest investment – their home – is being mishandled, mistreated, and misrepresented. This is about the consumer who is nervous about the home-buying process already, and who will now be lead to contact an agent that knows nothing about the property they are interested in, for no other purpose than for StreetEasy to make money. There is no vetting process for agents who pay to get into the Premiere Agent program other than a credit card number. [Emphasis mine]
As Greg Robertson points out, this “unqualified agents buying leads” thing has been an issue with portals forever. At the same time, there is no clear consensus on what does qualify an agent to hold herself out as an expert. If there were a vetting process, as Ryan Serhant seems to want, what would that look like? What would the person or company doing the vetting look at?
I don’t know Ryan at all. I assume he’s an amazing guy, being incredibly successful and a TV star besides. I’m just using him as an example because (a) he has a high profile and is well-known, (b) he has taken a stance in the Streeteasy issue, and (c) he has clearly articulated the issue of “unqualified agents” getting leads.
So when he protests Streeteasy’s Premier Agent program because it means that the “seller whose single largest investment – their home – is being mishandled, mistreated, and misrepresented” then I’m curious what being properly handled, properly treated, and properly represented looks like. Because on his Streeteasy Profile, I see that Ryan is the listing agent on 128 properties in New York City from the Upper East Side to Tribeca to Brooklyn. If you know NYC, you know that neighborhoods in NYC are more akin to city-states than to just neighborhoods. There is no way in hell that any person could be a local expert in Soho and the Upper East Side; those areas inhabit not just different zip codes, but different social galaxies.
Outside of NYC’s weirdly compacted universes-within-20-city-blocks environment, we have very similar issues around the country. Here in my home city of Houston, you cannot convince me that an agent who is a local expert in Katy (my west-side, outside-the-beltway suburban neighborhood) is also an expert in Montrose and in Pearland and also in the Woodlands. It’s not possible. Might as well claim that you’re a local expert in Dallas and San Antonio while you’re at it — which you can do, legally speaking, since your real estate license is from the state of Texas.
So this issue is endemic and fundamental to the industry, and therefore, here are my questions to you all:
- What should be required before an agent could legitimately be considered an expert in an area, neighborhood, or town?
- What should that vetting process look like?
- If you run a brokerage or a team, do you have a vetting process? What does it look like?
- If I were a consumer, what would you advise me to look for/ask a prospective (a) listing agent, and (b) buyer agent to determine whether she is a legitimate local expert or a faker who doesn’t know squat?
Would love to know your thoughts!
-rsh
24 thoughts on “Local Expert: What Is Required?”
Love your perspective! Expertise in a particular community would take, in my mind, either living there or having lived there in the past 5 years (give or take) and ideally you have sold 3 or more homes there as well. Regionally I would think it takes a lot more than the sale of 3 homes to be considered an expert at all. We have so much new construction in this area it’s hard to keep up with all the new subdivisions BUT I can advise regarding my experience and reputations of the builders and how long they have been around. There is definitely an opportunity for portals such as Zillow to vet their neighborhood experts….I’ll be waiting ~Sherry
Good stuff, Sherry. Thank you.
Can you imagine the OUTRAGE-A-PALOOZA if Zillow started “vetting” local neighborhood experts??? Oh my God. Jay Thompson just had a tiny relapse just thinking about that….
How does one define, “expert” for everyone? People have different ideas of what expertise is, and is not. They have different wants, desires and needs.
Having a “third-party” site decide for the consumer who the “experts” are seems fraught with issues. We (Zillow Group) can (and do) supply data to help consumers choose an agent, but I think it’s out of our scope to identify neighborhood experts. Ultimately, it’s the consumer that needs to make that decision. Isn’t it?
Hey ROB,
IMO,
(Bullet one) – Production…..the more the better
(Bullet two) – (from a broker’s perspective) What does your sales and listing experience look like? For consumer…see #4
(Bullet three) – see #1, 2 and 4
(Bullet four) – Transaction detail and maybe a pop quiz regarding local sales history, street names, school boundaries, what time Starbucks closes 🙂
In my overall experience, the local experts know most everything about their market; what’s on the market, what’s traded historically, pricing….the experts I know, are experts and they are not that difficult to find…most are the highest producers or close to it…..
Thanks,
Brian
Speaking from a background of having worked with hundreds of agents across Southeastern Pennsylvania over the past 25+ years, I must conclude that a very, very small number are bona fide local experts in most of the areas in which they have listed and/or sold homes. I have long maintained that municipalities should provide voluntary “certification” classes and publish lists of those agents who obtain the certificates. Every time I have queried an agent as to whether s/he would attend such a venue to seek the certification, I received negative comments and responses. Perhaps, in lieu of agent certification, municipalities could prepare guides/suggestions for residents and prospective buyers “Things to ask your agent when considering listing/buying a home in [town]”
I’ve long thought the local expert space is a compelling opportunity. There’s certainly a consumer win for the taking if done right. It’s a damn hard nut to crack from an incentives perspective. Of course — if it was easy, someone would have figured it out already… and it wouldn’t be creating any new, real value.
A few thoughts from a over a year ago: http://geekestateblog.com/the-local-expert-opportunity-in-travel/
Years ago I wrote a class called “Certified Neighborhood Specialist” CNS with the concept of “What makes an agent an expert?” Knowing the neighborhood, home builders, models and plans, HOA, impairments, improvements, potential outside influences and the list goes on. When we offered the course, agents would have to identify neighborhoods and supply written information that could be validated on the neighborhood. Boggles the mind the audacity that someone would hold themselves out to be an expert and has no validity … doesn’t happen in most professions.
How many years ago are we talking?
Have you looked at StreetAdvisor?
(disclosure I used to consult for them)
While I get your point about an individual agent, Serhant is a leader of a large, successful team consisting of +/- 40 brokers or sales people which is a lot of “local experts.” Most of those are in the NYC area with a handful in the Hamptons, LA and Miami.
As Greg Fischer pointed out, many agents would take a listing in an unfamiliar area and use that as an opportunity to do a deep dive and get as much knowledge as possible to represent the client in a professional manner while also opening a new area of growth for their practice.
Yep, like I said, this isn’t really about Ryan. I’ve never met the man, and I’m sure he’s a great guy doing great business.
The “agent vs agent team” point you raise probably takes us down another rabbit hole. But consider this: in his Instagram post, Ryan says “I currently have 128 active listings on StreetEasy” rather than “We currently have….”
Yeah, yeah, that’s just agent team lingo where the team leader takes all the credit for all of the transactions and all of the listings, but if you’re going to do that, you can’t then turn around and say “Well, even though I am an expert only in Soho, my team has 40 brokers who are local experts in their neighborhoods.”
I seriously doubt that Ryan is walking into a $6.5M condo in Upper East Side with an Associate saying, “Hey, thanks for contacting me, but I’m not the local expert in this area, but Tina here is. So she’ll actually be working with you, but we’ll have my name on the listing.” So if he’s not doing that, he IS holding himself out to be the local expert — then passing that on to a real local expert on his team. He’s free to do that, of course, as is any broker or agent or team leader.
But then to say agents who buy leads in an area “they know nothing about” are misrepresenting, mishandling, and mistreating clients is… well, multiple sides of the speaking orifice and so on.
TL;DR version: If you’re a team leader, then either (a) market the TEAM, or (b) market yourself. If the latter, don’t go throwing stones about local expertise if you’re not one in EVERY SINGLE MARKET.
“This isn’t really about Ryan.. ” followed by 250+ words on why it’s all about Ryan. WITH CAPS! 🙂
Heh, you got me there RQD. 🙂
But the “this” was referring to the post and to the question. My response was indeed all about Ryan. 🙂
Hmmm… does selling a lot of homes in a particular community make you an expert in that community? Perhaps, if the community were planned, recently constructed then all of the homes would pretty much follow a standard set of floor plans, construction, etc. But what about these funky communities that were started in 1962 with construction still going on today with no designated builder, no specific plans – except for the community’s restrictions (this particular community even has 13 different sets of the deed restrictions!) and a plat map. So even if you sold a fair number of homes in this community you would still not understand an individual home that may be updated, or remodeled, completely gutted or brand new.
What makes an agent useful – even valuable, is the willingness to admit they don’t know something and then find the answer and be honest about it. We can have knowledge of communities, towns, cities, counties, but we can’t know all there is to know about a specific home. The seller has to help and even then they may not know (inspections!). Perhaps we should not strive to be local “experts” rather real estate advisors who work as a team member with the buyer or seller to get the knowledge needed to create the optimal transaction and not worry so much about knowing when the local coffee shop closes.
Aileen,
From my experience, the experts have become experts by helping buyers buy and sellers sell. The more that’s done the more that is learned. Kinda like surgery…the more times the surgeon does a heart transplant the more expertise he/she gains. The surgeon gets paid per operation.
I’m surprised with the degree of deflection here, I thought ROB’s questions would result in the same type of responses; the largest producers in the local market are most likely the ones with the most expertise regarding that particular market….maybe that is just not true in every market? Could also be a difference in how we define “expert” as it pertains to our unique marketplaces?
To me, an expert in our local market knows just about everything as it pertains to time and sales…some are scary good. All these expert local agents are large producers.
Always learning…:)
Thanks,
“a difference in how we define “expert” as it pertains to our unique marketplaces”
Yup, that’s the crux of the issue imho.
Production is a factor but without additional knowledge of the area someone cannot be an expert. How many kids in the neighborhood, what are the schools like, are there adverse conditions that may make this investment less beneficial. Selling a lot of homes in an area does not make someone an expert … it is a good start.
Part of the problem is agents can’t specifically have opinions about which hoods a buyer should move to, due to fair housing laws. Unfortunately, the result is they have to refer buyers to neutral sources for schools and crime information.
I’m really not trying to be a jerk, I am just pushing back a little….too much time on my hands? 🙂
ROB asked: “What should be required before an agent could legitimately be considered an expert”?
Maybe I should present my point in a different way. Can an agent be considered a local expert without ongoing participation in the core business process – doing deals?
I don’t think so.
I think it’s assumed that an expert would have a high working knowledge of community demographics, schools etc. but, IMO, only through repetition of skills with authority (a licensed real estate agent) can someone be considered a real expert in their field.
I’m really arguing that the greater amount of successful experiences (deals / production) is at the top of the requirement pyramid.
I’m getting the feeling that this is a sensitive subject….probably why ROB asked it 🙂
Thanks,
Interesting point about agents resenting non-local-expert agents buying leads in their area on Z-T. I’d argue this resentment extends to inexperienced agents that stumble across million dollar listings. Some of the resentment may be about perceived fairness, but I believe for good agents it’s about competence. It’s the well-qualified local buyer or seller’s agent that does most of the work. The inexperienced and/or non-local agent gets half the commission, but they are often just along for the ride.
I don’t see a solution, but I can tell you what it will look like. It has to be voluntary and easy to implement for brokers/agents, it doesn’t require a new fee or a law, it has to be fair and transparent (work=reward) and it has to add value for both the broker/agent and the consumer.
The only thing I’ve seen that comes close is the Professional Photographer’s Association Master of Photography designation. If your wedding photographer has M.Photog. after his/her name, they are good at it. Where it fails is that while every professional photographer knows what a Master is, the general public does not.
I also find the Real Living 360 Service program interesting. It assumes better brokers make better agents. RL aggressively polls every client after a transaction and uses the results to rank the brokers. Poorly performing brokers are given additional training by the franchise.
Neither of these are the solution, but I think they fulfill many of the requirements of what a good solution for expert local agents would be.
But, for those that are REALTORS, don’t forget the Code of Ethics goes further than state license law does. You say the state licenses you to sell real estate in the whole state, but the REALTOR Code of Ethics requires REALTORS to do more than simply have a licensee to represent a client in a given area.
Perhaps we don’t even need to discuss the distinction. Perhaps we need only to require the portals to prominently disclose that they are media outlets, not brokers, and that agents pay to be advertised on their site. Let the consumer beware and make their own determination about whether the advertised agent is expert enough.
Meanwhile, brokers better be demonstrating their local expertise on their websites in whatever manner passes for expertise locally. That way, when the consumers do their due diligence on portal agents (if they do), the real experts are found in a simple google search.
Too many people in our industry are lumping the portals in with the brokerage websites and it’s our own darned fault. Portals are not brokerages and somebody needs to take the lead in explaining to the public why that is.
Be careful now when you point fingers at the portals here. The single biggest issue Sellers should have with regard to “misrepresenting, mistreating or mismanaging” listings falls 100% on the industry. What about the 1.2 million IDX powered web sites that now advertise listings for brokers and agents that have NEVER seen or nor do they have any deep or direct knowledge on any of the properties they are advertising? Has every agent seen every listing in the MLS in their market? If Amazon were to do something similar on their site, they would be sued by every product owner and indicted by the consumer for misrepresentation. Members of your MLS totally misrepresent the properties you have listed everyday! You had better hope your Sellers don’t soon uncover that MLS-sponsored reality. And if you have concerns related to “unqualified agents” buying leads and conducting transactions, what is the MLS doing to screen agents before they give them an IDX feed to represent thousands of properties to consumers to generate leads that they are incapable of converting? Answer, nothing. So I think when you go to point fingers at the portals for all of their shortcomings – you should do so with a mirror in front of you.
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