Is It Really Global
I’ve read and heard countless books and blogs about how “global” real estate has become. I agree that there are out-of-area and even out-of-country buyers who are buying on-line and that the marketing of the properties should make the buyer appreciate all the fine aspects of the home virtually, before viewing. However, to service a listing or a buyer, local knowledge is difficult, if not even impossible to replace.
The Emerging Trend
My wife and I enjoy taking walks about our lake side community and driving home by various means t appreciate our neighbors. In the current difficult market that is effecting our region, I’ve noticed that there have been an influx of agents taking listings that are an hour to an hour and a half away. My wife and I purchased our home in November, the listing agent is from an hour and twenty minutes north of here. Just yesterday I took her For Sale sign to the dump. I can’t blame her, the sign may cost $50 (probably provided by her company) and the gas alone to make the three hour round trip is probably $100. This is not a local issue, I’m afraid. I’ve been hearing more and more about long distance listing agents as of late.
It’s Too Easy to Market to Seller’s
With the services of the third party “lead generators” (I hate that term) and agent internet presence, the practitioner can project that they service just about any market place in their licensed state. I recently did a search on “real estate <local market>” and first three companies that came up were not even remotely in our area and have never had a listing in the entire county. Article 11 & 1 of the NAR Code of Ethics and most state’s real estate regulations require a practitioner to disclose issues that they are not competent in . However, even if these statements did exist, the professionalism of the Agent should be a driving force to disclose their lack of local knowledge and issues that may be a problem in the care that they may provide a client.
What Issues May Arise
Below is just a brief list of things that can be detrimental to a Buyer or Seller with an out-of-area agent:
1. Access to Property – Different lockboxes and availability of the listing agent to make the home readily available to a buyer is a significant issue.
2. Fair Housing – Yes, there are fair housing regulations that are Federal, but local jurisdictions are able to add their own protected classes. This may be an issue for Sellers who don’t want certain people groups (don’t get me started on how narrow minded this is) to buy their homes. If you continue to service the listing, you could be risking your clients and yourself.
3. Presentation of Offers to Purchase. Most states require that offers be presented in a timely manner and many sellers do not have fax machines or the ability to scan documents, even if you can e-mail and present over the phone. This may cause a unnecessary delay and opportunity for the buyer to withdraw the offer prior to ratification.
4. Maintaining and inspecting the property. Far too often our nice subdivision is disgraced by listing agents whose signs have been lying in the ditch for MONTHS before some neighbor takes and throws them away. The grass and overall appearance of the property declines, making it impossible to sell, because it’s simply to far for the agent to routinely inspect and make recommendations to the sellers.
5. In-House Sales. I don’t (at all) advocate single agent, dual agency; but 60% of most companies listings are sold by agents in the company. Local companies tend to be who the buyers call, they tend to know their own inventory better and are better able to recommend homes they have visited and know enough about, to encourage a showing.
6. Local Trends, Amenities and Conditions. Local agents simply know more about the area that they work in regularly. Knowing about caveats pertaining to neighborhood development or decline, is critical to good buyer representation. Buyer Agency is becoming more litigious, as judicial circuits are agreeing that buyers decide what is material to their transaction, and telling their Buyer’s Agent means that the agent must show due diligence and competency in ascertaining answers to the buyer’s concerns. For example we have a local home owners association that still has a first right of refusal requirement. Because of this, VA will not provide loans to this community. An unaware buyer agent could show homes in this large development for months before realizing that the buyer cannot purchase there and may have lost other good opportunities while wasting their time.
7. Local Customs. Whereas state licensing laws are always the same, many local markets have traditions or customs that are unique to them. Not knowing what these customs are, may hurt you in the terms of the contracts. Ratified Contracts being a “meeting of the minds” is a difficult aspect of practice. Most contracts still leave some ambiguity that requires the principals in the transaction to relay on the Agents explanation of the terms. If the agent leads them downt he wrong path, there could be more serious issues in the end.
All this to say – stay out of someone elses’ back yard. If you can’t provide good service, don’t attempt to provide service at all. I am sure that there are many other good reasons to work in a micro-market, so please feel free to share your experiences!