We all know that knowledge is power. That’s true in all fields. Real estate is no exception to the rule. In a business where the associates are predominantly independent contractors paid solely on a commission basis, success is indeed predicated on how good they are at the sport. Question for you: how do you define and qualify “knowledge”?
I heard so many different answers to that very question through the years that my head is spinning. Each one of them makes some sense, although not all of them are convincing. Try this fairly common answer for example: “I am a top producer, so I am an expert in my field.” It could be the case, but I would argue that there are quite a few real estate professionals who confuse “knowledge of salesmanship” and “knowledge of the business.”
The best agents possess both. They know HOW to sell, and they know WHAT it is that they sell. It is important to be good at getting buyers or sellers to pull the trigger because, after all, they want to buy or sell, not waste their time with an agent who does not know how to finish the job. At the same time, it is even more important to know everything that there is to know about the market and the property that might affect the value or the desirability of a house, especially at the top of the price ladder.
Believe it or not, a good fraction of the Realtors out there don’t even know such basic things as the population of the town where they have a listing, or the owner-occupied ratio, or the percentage of listings that actually sell, or the time on the market, or the delta in between the original listing price and the sales price, or…. Talk about knowledge is power!
No question that all good agents must know how to use their negotiating skills as much as they know how to leverage their business acumen, their knowledge of the business, the transaction process, the market trends, and of the property they wish to list or sell. If you have to settle with only one of the two types of knowledge, I would argue that the latter is more important than the former. After all, we are selling homes, not hot air.
Real estate is not meant to be an easy job. A real estate license only gives us enough knowledge to be dangerous. Learning is a daily requirement in the quest for excellence. The more we know, the more relevant and essential we are to the principals we represent. It is not a guessing game where it’s OK for buyers & sellers to pay for our mistakes. We know or we don’t. We belong to the profession or we are better off looking for another way to make a living.
What is important for a listing agent to know when answering questions from a possible buyer or a fellow Realtor? Pretty much everything, outside of legal matters and facts that only expert inspections can bring about. Yet, many agents who have a listing or are holding a listed house open over the weekend, would start perspiring heavily if they were “challenged” by some of the following easy questions:
- In this town, what is the maximum square footage I could build on the lot?
- Does this include the basement?
- Tell me about the setbacks for construction and any existing easements?
- If I were to put a second story, what are the maximum height allowed in this town?
- If the house is an historic landmark, what can I do to renovate it or destroy part of it?
- How many homes sold last year in this neighborhood?
- How much have prices gone up, on average, so far this year?
- Where do you see prices going over the next few months?
- Tell me about the comps you are using to justify the listing price?
- Tell me about the schools?…
Pretty basic stuff, really. Does not take much homework to come up with the answers. We are paid for the good ones. “Buyers beware” only goes so far. Buyers & sellers have to rely on what we know that we should know. Any argument with that?