Home owners have high expectations and so they should, especially if they have opted to use the service of a professional, traditional estate agent. The old adage that sellers want to sell their homes as quickly as possible, for as much as possible, with as little stress as possible, is still true. And with property data now available to savvy buyers, sellers and investors - it begs the question, what is the value of traditional estate agents today?
According to Anthony Stroebel, General Manager of Real Estate Services, Pam Golding Properties, the value of the professional agent is found during the following complex and nuanced stages of the property transaction:
- It is seldom a simple linear transactional process. It is often characterised by its own set of unique complexities and nuances that require the experience, wisdom and insight of a real estate professional to navigate. This is particularly the case when the various market cycles pose even greater challenges. Consider the so-called ‘sellers’ market’, where there is a shortage of stock and many buyers are competing for this stock – creating high demand, which inherently bodes well for a smoother transaction. Now consider a less buoyant market where there is excess stock and fewer buyers, this characterised by waning consumer confidence and sentiment, political uncertainty and economic challenge (somewhat akin to current South African trading conditions) – this requires a completely different set of professional real estate skills to successfully conclude a sale - for instance, to close the sometimes 30% gap between asking price and the buyer’s offer. This requires very sound market understanding and adept negotiation, as well as intricate understanding of human behaviour.
- It is fundamentally risky when one considers that even though it is often someone’s most valuable asset, they are unlikely to transact more than three or four times in their lifetime and are therefore not sufficiently skilled to transact. The role of astute estate agents is to mitigate this risk and ensure a complete sense of comfort.
- It is driven around the now globally-ubiquitous property portal which has supposedly levelled the playing fields as far as gaining access to buyers’ leads is concerned. This supposedly devalues the role played by estate agents regarding their ability to attract buyers. This too is somewhat of a misnomer. Yes, the property portals – also utilised by all professional traditional estate agencies as well - do in fact drive quantity, but what of quality? Any top-producing professional estate agent will tell you that they would far rather have fewer yet more qualified buyers than more unqualified buyers. It is therefore integral to an agent’s service that their personal network has the ability to access the ‘right’ buyers for a property and that these buyers are then strategically managed to ensure the closest market-related offer is brought to the benefit of the seller. In fact, this is the fundamental benefit of awarding an agent an exclusive mandate, because it gives the agent the ability to properly manage the potential buyers on a property, rather than resulting in agents competing with other agents to rush to close the deal first, thus not putting the best interests of the seller at the heart of the transaction.
- As the value of a home increases, there are increasingly fewer buyers available. The really good agent and their brokerage have access to these buyers. And this is when the key skills of the estate agent truly kick in – to close the deal. It is no easy feat to guide both parties to reach a mutually binding, written agreement that covers a myriad of issues that could potentially create disputes after the sale. Remember that in the South African context, the estate agent is in fact managing the tension between what are ostensibly two diametrically opposing desires: the seller, who wants the highest price; and the buyer, who wants the lowest. This ‘dance’ requires extremely adept human skills and an understanding of sales psychology.
- Correctly positioning a property’s price in the market requires professional expertise. In short, this is a fine balancing act - get this wrong and the property simply sits on the market and runs the risk of becoming ‘stale’. Incorrect pricing creates a long, arduous process. It causes fatigue and a great deal of seller discontent. Also, the property invariably sells for far less than it ordinarily would have, had it been correctly priced at the outset. A good agent is able to instil confidence in the seller because he or she is truly at the forefront of what’s happening in their specific sales territory. Online information and property valuation mechanisms can serve to provide scientific analysis as to pricing – but it is the intuition and skill of the experienced and professional agent that further positively influences this price in the seller’s favour.
- You get what you pay for. In conclusion, this somewhat clichéd adage is true. Certainly, there is room in the industry for discounted service offerings, but these translate into a discounted version of all the factors noted here, most particularly, service. This means that the mitigation of the risk inherent to selling any residential property, plummets with the price charged for the service. Clients who choose these ‘lesser offerings’ simply need to be aware of this. It should also be noted that the points mentioned above pertain generically to the concept of utilising the services of the so-called traditional, commission-earning, estate agent. However, it is only those agents who are in fact able to provide the value as defined, who are really worthy of their premium commission.
If you are considering selling, buying or letting a home, we recommend contacting Pam Golding Properties to find out more about your area and obtain professional advice.