Advice from Dirk Zeller at Real Estate Champions. 

What Real Estate Agents Are and Are Not

Dirk Zeller
CEO
Real Estate Champions

Real estate agents join doctors, dentists, attorneys, accountants and financial planners in the ranks of licensed professionals that provide guidance and counsel to clients. The big difference is that most agents don't view themselves as top-level professionals. A good many agents, and a good portion of the public, perceive agents as real estate tour guides, or as home inventory access providers, or even as just a necessary cog in the wheel of the property sale transaction. The best agents, however, know and act differently.

In fact, real estate agents are fiduciary representatives and financial and wealth advisors ­- not people who are paid to unlock front doors of houses for prospective buyers. Build your real estate business with a strong belief in the service and benefits you provide to your clients and you'll provide a vital professional service while being recognized as the valuable professional you are.

Serving as a fiduciary representative
Real estate agents represent the interests of their clients. As an agent, you are bound by honor, ethics and duty to work on your client's behalf to achieve the defined and desired result. This involves the following functions:

• Defining the client's objective. To serve as a good fiduciary representative you need to start with a clear understanding of the objectives your client is aiming to achieve through the sale or purchase of property. Too many agents get into trouble by starting out with uncertainty about the interests of the people they are representing. To avoid this pitfall use a comprehensive questionnaire when interviewing and qualifying prospects.

• Delivering counsel. In the same way that attorneys counsel clients on the most cost-effective way to proceed legally, it's your job to offer similarly frank counsel so that your clients reach the real estate outcomes they seek.

An attorney might encourage a client to proceed with a lawsuit when there is a high probability of winning, or might counsel an out-of-court settlement when odds point toward a court loss that might leave the client with nothing but legal bills to pay. Likewise, you need to be able to steer your clients toward good decisions regarding the value of their homes, the pricing strategy they should adopt, the marketing approach they should follow, and the way their contract should be negotiated in order to maximize their financial advantage.

• Diagnosing problems and offering solutions. A good agent, like a good doctor, spends a great deal of time examining situations, determining problems, and prescribing solutions. In an agent's case, the focus is the condition and health of the home a client is trying to buy or sell. The examination involves an analysis of the property's condition, location, neighborhood, school district, street appeal, landscaping, market competitiveness, market demand, availability for showing, and value versus price. The diagnosis involves an unvarnished analysis of what a home is worth and what changes or corrections are in order.

Where agents get into trouble is when they lack the conviction to tell clients truths they don't want to hear. If a home is overpriced or not ready for showing, or if an offer is too low for seller consideration, it's the agent's job to speak up with sound advice.

• Troubleshooting. Unavoidably, there will be plenty of times when, as an agent, you need to be the bearer of bad news. Market conditions may shift and the price on a seller's home may need to come down. A buyer may need to sweeten initial offers in order to gain seller attention. A loan request may be rejected. The animal smells in a home may be turning buyers away. A home that buyers really wanted may sell to someone else. At times like these, your calm attitude, solution-oriented approach, and strong agent-client relationship will win the day.

Guiding financial decisions
When you counsel clients toward real estate decisions, your advice will have a long-lasting effect on your clients' financial health and wealth.

In most cases, home equity is the single largest asset that people own. Your ability to guide clients to properties that match their needs and desires, that fit within their budgetary constraints, and from which they can experience long-term gain from minimal initial investment will impact their financial health and wealth for years to come.

Your influence as a wealth advisor reaches far beyond clients who are in a position to own investment real estate. In the early years, many of your clients may be first-time buyers who are making an initial foray into the world of major financial transactions. Advise them well and they will remain clients and word-of-mouth ambassadors for years to come.

Avoiding the role of a home inventory access provider
Back in the old days of the early 1990s, before the advances of the Internet, the consumer's only avenue to information about homes for sale was through a real estate agent. Every other week agents received phonebook-sized periodicals presenting information on properties for sale, with each new entry accompanied by a small, grainy, black and white picture.

Today, consumers can go online rather than to a real estate office to launch their real estate searches. With a few keystrokes and mouse clicks, they have complete access to a greatly expanded version of the kind of information that agents used to control. However, once consumers learn of a home they want to see, they need to contact either the owner or an agent to gain inside access, and here's where things get tricky.

Often a consumer signs off the Web and contacts an agent to get inside the home, as if the agent is simply an entry device. As an agent you'll need to demonstrate special skills to first qualify the consumer's interest and ability to buy and then to convert the inquiry into a committed buyer client for your business.

Agents as Necessary Evils: A Mindset that Comes and Goes
The mindset that agents are overpaid and unnecessary to the real estate sale process takes hold every now and then, gaining momentum especially when a robust market leads to low home inventories and the quick sale of homes that often receive multiple offers during the short time they're on the market.

When times are booming, a segment of consumers and new homebuilders begin to question the value of the agent's services against the associated fees. During the best of market times, some homebuilders even go so far as to sell their houses without allowing agent representation - or compensation.

The silver lining is that when times are good so many properties are moving that the few listings affected by the agent-is-unnecessary mindset hardly limit opportunity. Plus booms don't last forever. When the market swings back to neutral you can bet that competition for buyers intensify, inventory levels expand, days on the market lengthen, and sellers ­- including homebuilders - start courting and even listing with agents again.  

Real Estate Champions rec@dirkzellertraining.com