“There are three kinds of lies: lies, damned lies, and statistics.” Mark Twain.
Some Realtors make a lot of claims that sound good, until you investigate them.
Average Time on Market
A few years back there was a real estate broker in my market blanketing the radio with ads touting her average time to sell a property as seven days. It was true. She’d sold a total of one house, and she sold it in seven days.
In 2012, as we were starting to come out of the crash a “superbroker” advertised his average time to sell a property as thirty days. The average time on market was about ninety days. In my opinion, you don’t beat the average to that degree without underpricing property – listing and selling your clients’ properties for less than they could bring.
“My Listings Sell for 5% More Than the Average Broker”
What they want you to think is that if you list your house with them, you’ll get 5% more than if you listed it with a competing broker. That’s not what it means. What it does mean is that the houses they sell are, on average, 5% more expensive than the average of all brokers. It is a meaningless statistic designed to mislead sellers.
Think about it. A broker working an upscale neighborhood will have a much higher average sales price than a broker working a middle class area, even if the broker working the middle class area sells ten times the dollar volume.
“I Sold 200 Houses Last Year”
No broker sells 200 houses a year all by his or her self. A broker who claims to be selling 200 houses a year relies on a staff of brokers to sell houses. That broker may or may not actually sell any houses themself. Some of the staff brokers will be competent, experienced professionals, others will be incompetent and/or inexperienced.
When it comes to hiring a real estate broker, nothing matters more than the broker who will actually be representing you. Don’t buy the superbroker, buy the broker who will be representing you.
Many brokers tout their teams. The “team” can be anything from a single broker calling him/herself a team, to an actual organized team with brokers specializing in representing buyers, brokers specializing in representing sellers, and an administrative staff.
Like any other product, real estate “teams” vary in quality. When it comes to hiring a real estate broker, nothing matters more than the broker who will actually be representing you. Don’t buy the “team,” buy the broker who will be representing you.
“My Brokerage is the Best”
Real estate brokerages are not like other businesses.
Real estate brokers are almost never employees of a brokerage, they are independent contractors who often receive little in the way of supervision and training from the brokerage. Real estate brokers pay a percentage of their commissions (as much as 50%), and, usually, a monthly fee, to be associated with a brokerage. A brokerage can make money from a broker even if they never sell anything.
Real estate brokerages will hire any newly minted real estate broker with a pulse, a half decent car, and a suit. If the broker sells real estate, the brokerage makes money, if the broker washes out, the brokerage still makes money.
The best brokerage still has some lousy brokers.
When it comes to hiring a real estate broker, nothing matters more than the broker who will actually be representing you. Don’t buy the brokerage, buy the broker who will be representing you.