The true Cost of Retaining a Mediocre or Unsuitable Real Estate Practitioner
Updated: Mar 28, 2018
IT'S MORE THAN YOU THINK
If you ask ten people who have recently bought or sold a home in the past 12 months, the chance that at least 5 of these 10 people indicate they had a poor experience is pretty good. There are many mistakes home sellers make when choosing a real estate agent and the same can be said about home buyers who are hiring a buyer’s agent.
THE TRUE COST OF A BAD APPLE
The financial impact is often easily quantifiable and monetary losses can be significant. In many cases much more than 10% of the property value. That's an exceptionally high price to pay. In addition, poor performers negatively impact the perception of the real estate industry, and a bad image can spread like a virus.
Unfortunately, less competent real estate practitioners aren't always easy to spot by the unaware consumer. I've seen sellers and buyers deciding to retain inadequate agents for many reasons. Later, when they realize the poor performance, it’s often too late. The damage was done, and they wasted precious time and money.
You can understand, then, how essential it is to hire a home-run real estate agent,… a true sales & marketing professional who is a master in the area of high value asset re-marketing. More than often sellers and buyers are under the misconception that they can't afford the high price of top professionals.
You’ve probably seen the famous quote around before – “If you think its expensive to hire a professional to do a job, wait until you hire an amateur!” - but it is ever so true in the real estate industry.
What’s interesting about this quote is the fact that many of us don’t take heed of its simple advice until it’s too late. Everyone wants a good deal and to feel like they kept themselves from being taken advantage of, but quite often this approach will backfire. Most people don’t value what they don’t understand, so they set their own “internal” price and find someone inexperienced to match it. Unfortunately, this can be a very costly decision.
WHEN GOING CHEAP IS ACTUALLY MORE EXPENSIVE
When I relate this to real estate, I think about the folks that made the decision to use an inexperienced resource, selling a home for a reduced fee, and at the end it cost them much more. I’ll give you a hypothetical example: A home is listed for sale and the actual asking price has been calculated too low (it happens every day). In addition the real estate practitioner agreed to reduce his fee. Finally, after quite some time, the home sells at a discounted / reduced price. The seller saved 2% percent in sales commission but realized at the end that his property sold for approx. 15% below what a professional sales & marketing professional could have achieved.
In an effort to be cost-conscious, the seller had decided he couldn't afford a seasoned pro and hired a much less experienced (but enthusiastic) individual to sell his home at a reduced fee. Well, things turned out quite differently. If the seller had hired a professional to list and to sell the property, he would have received a higher price and the overall result would have been much more economical. Sadly, this story is a common one.
Buyers on the other hand often don’t realize that professional real estate services are completely free for them. They can retain the best at no cost to them.
So to summarize, it is generally much more expensive to hire an amateur. The damage that can be done by the not so professional service provider is not worth the risk and the costs of mistakes and errors can be huge.
Michael Turwitt has long represented buyers and sellers in the purchase of fine properties and high value assets. Specialized in extraordinary quality homes and luxury property, Michael Turwitt enables clients to successfully navigate the complex North East Florida – First Coast Real Estate Market. For more information, visit www.turwitt.com