Realtors - Consultants or Contractors?

The choice is yours, but I have always found the question incredibly interesting.

 

When I am contracted to do development consulting, I always have a similar up front conversation with the developer and explain my role under contract with them.

 

In many instances, we work hard to seek out the best advice we can possibly attain, particularly when it comes to personal and financial matters. We go out of our way to find referrals to professionals who can help us and guide us in making the best possible decisions. We attempt to use their experience to supplement our experience.

 

Often times, we seek another experience, that experience may come late in the evening sitting at a bar and asking the person next to you what they thought about, for example, “The Stanley Cup Playoffs last year”. A good conversation and one where we can banter about different ideas, none that personally will affect our individual futures.

 

Now imagine yourself on the same bar stool, chatting to the guy next to you after a few glasses of wine and saying “what do you know about brain tumours?. You see I have this pain in my head and I believe it might be a tumour, what do you suggest I do? Of course it sounds like a ridiculous conversation and one that should definitely be undertaken with a qualified medical professional, yet this type of conversation happens all the time with real estate and often financial planning.

 

REALTORS® are contracted by you to provide consulting advice as an Agent for you. They must guide you with the benefit of their knowledge and experience to make the right decisions. That is usually how the relationship starts in 90% of circumstances.

 

It usually lasts that way for perhaps two meetings, then you often turn the consultant into the employee. One simple statement does that and here it is... “No I believe my house is worth more than that so list it at this price please”. What you have done in many instances is instruct the Realtor to ignore their own experience, disregard current market data and list a home at a price you determine is more appropriate. You now, in my humble opinion are closer to an employee relationship. What is more concerning is that the marketing plan the REALTOR® had presented to you is no longer valid. A fundamental principle of marketing is presenting the right product at the right price to the right person. Change the price and the whole equation changes.

 

Some of this is happening currently and it often leads to a Seller chasing their value down and losing a window of opportunity to sell at an advised price which later you may go below to effect a sale and often with another REALTOR® who will indicate quite clearly that the home perhaps has been marketed at the incorrect value for the past several months.

 

I am not suggesting that every single REALTOR® will give you the same value or that you should not do your own homework. Personally, I am willing to discuss price with a Seller but balance their perception of value with their personal plan. Not simply move the price beyond my suggested values for no apparent reason.

 

Too many times the profession is accused of pricing homes to sell in too quick a timeframe. What surprises me is that is what every Seller would like... some certainty for their future.

 

If you listen to your REALTOR®, treat their advice as you would a consultant, I personally believe your journey will be more rewarding and you will meet the expectations presented to you by your professional sales person.