Sizzling Real Estate Markets.
I live in Boise, a city that is on a number of the “Best Places to (Live; do Business; Retire; etc.)” lists these days. I’m sure the positive press is contributing to the residential real estate market that could reasonably be called “Sizzling.” As a member of the Greater Boise real estate law and business community, I see a constant stream of articles to that effect.
Real Estate is a cyclical industry. I have been personally impacted by boom-and-bust cycles in Austin, Colorado Springs, Reno, and even Silicon Valley. One of the things that happens in these cycles is that a lot of new real estate agents enter the market when it is booming, and then exit the market after the bust and the work has vanished.
I am hearing about lots of new agents entering the market here. I was prompted by my friend and real estate professional Jolene Anderson (who is also President of the Boise/Sun Valley chapter of the Keiretsu Forum), so I think now would be a good time for me to warn about the kinds of mistakes that new agents make in a hot market.
I write this to encourage brokers, seasoned agents, real estate educators, real estate lawyers and other industry veterans to help the rookies avoid the avoidable. Let’s all collaborate and be the “ounce of prevention.”
Causes of Problems Rookies Make.
- Haste Makes Waste.
Houses in this market are getting multiple offers as soon as they are listed. They sell almost instantaneously, for above the asking price, after a flurry of counter-offers. That’s a lot of documentation being written, revised and transmitted under enormous time pressure. New agents are especially prone to make mistakes when the pressure to be first exceeds the pressure to be correct.
- New Agents Don’t Know What They Don’t Know.
Think back to when you got your first driver’s license. You studied, took a training course, passed a written test, and passed the on-road test. Were you really a competent driver at that point? What did you learn the hard way only after you got into a collision or got a ticket?
A new real estate agent is like a new driver. They need the industry veterans around them to help them recognize and avoid the common bumps in the road.
- New Agents Will be Tempted to Wing It.
When everyone in the industry is busy, it can be hard for a new agent to get a prompt response to a question. The agent’s client wants fast answers on how to make a counter-offer. Minutes can seem like hours when there is a short deadline. The new agent will be tempted to figure it out by themselves.
A deal that doesn’t close (or that closes but contains material mistakes) hurts everyone – the buyer, the seller, the other agent, the brokerage’s reputation, and the image of the local Real Estate industry.
Brokers and other supervisors need to take time to train new agents on (1) the appropriate procedures; (2) the reasons behind those procedures; (3) their firm’s commitment to maintaining high standards of conduct.
I invite others in the industry to describe other common problems and suggest more ways for the Real Estate community to mentor the rookies.
Please note: the above post contains educational information. It is not intended as legal advice. Engage an attorney who is licensed in your state to get advice on dealing with any specific legal issue.
© 2018 Michael S. Oswald