In this monthly column, Anthony Askowitz explores a hypothetical Miami real estate situation from both sides of the broker/agent dynamic.
A veteran Miami real estate agent feels strongly about participating in her customers’ home inspections. Her broker wants her to focus on more productive uses of her time. Do real estate agents make the best use of their time through personal customer service or income-generating work?
Agent perspective
On the front lines of residential real estate, where all agents are generally doing the same activities, one of the few ways good agents can distinguish themselves is with a high level of customer service.
Some may call this an old-fashioned approach, but when you hold customers’ hands through the process, they really appreciate it, and this is what develops a good reputation — and more importantly, repeat business and referrals.
This human connection is also what distinguishes our profession from real estate websites and apps from which we also face rising competition. This is a “real world” truism that my office-bound broker simply cannot appreciate.
So when a customer’s contracted home undergoes a home inspection, I make it my business to attend, whether it is for a buyer or seller.
Even though there may not be much for me to do with respect to this specific activity (maybe a comment or two for the inspector), my customers want me at these inspections.
Furthermore, they expect it — and how bad would I look if my counterpart on a home sale is at the inspection for his or her client, but I’m not?
Also, during home inspections, I am not just sitting there; I call other customers, work on my laptop, and I am present to answer any questions the inspector might have.
My customers are usually happy just to have me on-site, and I consider this a valuable and productive use of my time.
Broker perspective
The essential question: Is the agent’s time equal to money? Most people say yes, but I say no. Agents can make or lose money, but they simply cannot get back their precious time.
In situations like this, I ask agents, do you clean your own pool? Do you cut your own grass? These are tasks that are typically outsourced.
My agent says she attends inspections for therapeutic and relationship-building reasons, and while I can respect those, I must make a logical counter-argument.
Quite simply, there is A-level, B-level, C-level and D-level work in real estate.
The A- and B-level assignments are ones that generate money and require an experienced and talented agent’s full attention, including listing appointments, prospecting, showing homes and writing contracts. (And even some of these responsibilities can be outsourced.)
In this case, babysitting a customer during a home inspection simply does not rise to this level.
Furthermore, I find the belief that customers want agents to attend inspections to be an assumption. (In fact, most buyers and sellers don’t even attend inspections themselves.)
If agents don’t offer their participation, I believe most customers would not even think to ask.
Extending my point about the importance of high-level service even further — to a degree some might find radical — I recommend to all of my top producers that they completely stop representing buyers.
I read a study years ago that clearly demonstrated that agents typically spend an average of eight hours with a seller and 32 hours with a buyer — a 4:1 ratio!
Buyer representation is a C-level service that could easily be assigned to a less-experienced agent in the office, team or partnership or outsourced to another agent in return for a referral fee.
I would say to an agent: figure out your hourly value. Take the amount of money you made last year, divide it by 52 (for the weeks in a year) and from this amount, divide how many hours you typically work per week.
This will give you your hourly value.
It is a great way of ultimately determining if you should be wasting your valuable time with C- or D-level work such as inspections, meeting appraisers, filing paperwork, etc.
I understand this is a challenging realization to make, and one that requires a whole new way of thinking. But facts, data and cold hard cash back up my position.
If nothing else, my agent should have complete trust in my desire to have her generate as much money as possible.
How to meet halfway
Both sides have strong and valid arguments in this situation. Agents should carefully consider the actual value of imprecise dynamics such as reputation, referrals and repeat business versus the value of focusing more of their time on income-generating (A- and B-Level) assignments.
A good compromise may be for the agent to take on C- and D-level assignments only for their most lucrative of transactions.
Anthony is the broker-owner of Re/Max Advance Realty in South Miami and Kendall, leading the activities of more than 165 agents. He is also a working Realtor who sells more than 150 homes a year.
