Do home buyers care what sign is in front of the house they love?

Inside the residential real estate industry there is a tendency for listing agents to sell the brand and not the agent. This is a common practice employed especially to help new agents get business. A new agent has no track record of real estate sales success, so they often rely upon the success of the other agents in their brokerage to gain new seller clients.

Even experienced agents competing for a listing will often emphasize their brand. They do so by comparing their office’s total sales (of all independently contracted agents, which gets higher with the agent count) to another office’s total sales; and give the impression that if more transactions are flowing through their office, this will have an impact on the selling price of your home. This is like Apple pointing to a segment of their competitors to justify why you should choose Apple products. But in real estate sales, this logic does not hold up. It is smoke and mirrors.

Why is this? Because while a brand name and brand sales volume might be important for most companies, it does not have a similar correlation for real estate brokerages. The agent is what matters.  In fact, what most consumers don’t realize is that each agent affiliated with a brokerage is a self-employed, independent contractor that chooses the skills they develop and the services they deliver.

And of course, buyers evaluate a house based on the attributes of the house (and the contextual factors such as neighborhoods, schools, economies, etc.).  Excluding the super luxury buyers (which is a market I am not addressing in this post), buyers could not care less which broker’s sign is out on the front lawn. Buyers do not buy signage, they buy homes.

So what does that mean for sellers? The fact that many sellers believe that a brokerage brand in some way impacts their home’s sales price is proof that consumers need more education about the real estate sales process. Sellers often overlook the most important attributes of listing agents because they are confused and overwhelmed by irrelevant statistics.

The process for selling a house is not a confusing process by any professional standard. However, doing it well does require time, a variety of skills, and the ability to manage lots of details. A great agent attracts qualified buyers and then makes a convincing argument that your home is worth as much or more per square foot than comparable homes; and this argument must hold up to scrutiny across several parties over several weeks until a deal is solid. Furthermore, this agent has to manage the transaction process, perform quality control, and motivate all parties involved in the transaction to perform until closing.

Moreover, the haphazard tactics that get many agents listings are often not part of the more sophisticated skill set that gets a seller the best price. It is a lot easier to get into the poker game than to actually acquire the skills to win the long, sustained game when the stakes really matter. The fact that about 1/3 of the single family homes listed in Stamford 2014 did not actually sell, is proof of this point.

Again, buyers do not buy signage, they buy homes. And skilled individual agents, not signs, sell those homes.

Sellers acquire services from real estate agents, not brokerage brands. Before you choose a selling agent, know what you are signing up for, beyond the sign.

 

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