Ethical Homes

To date, we’ve only had one negative review from a client. In the spirit of full disclosure and constructive criticism, we’re publishing that critique, as well.

A. C. was a buyer who wasn’t happy with her buying experience:

I felt that I was doing more of the legwork myself. Sweth only found one property that I had not found on my own—and that one was way outside the neighborhoods I was interested in… He did help in the contract phase, but I just felt I did more work to find my place than he did.

A. C. was right—she did do a lot more work to find her new home than I did; in retrospect, however, the real problem was that I didn’t do a good enough job of explaining to her that modern real estate agents usually didn’t find the homes that their clients ended up in, and making it clearer to her just what it was that I was doing to help her get into a new home.

In years past, real estate agents earned their commission by controlling information—they were the only ones with the access to the MLS, so they were the gateway to the lists of available homes, and thus just the act of providing that information to consumers and then showing the properties to prospective buyers was enough to warrant their getting paid. The Internet has changed all of that, however; now, information on new listings is available to any consumer who wants it.

As I often explain to buyers (but apparently didn’t do a good enough job explaining to A. C.), once consumers have access to that listing information, they become the experts at finding their ideal property, because nobody else knows what they want as well as they do, and nobody else is nearly as passionate as they are about finding that perfect home—a good agent is typically working with anywhere from one to ten active buyers at a time, and only a fraction of the time that they have for each buyer can be spent searching through listings for new properties, whereas for most serious buyers, looking through available listings for their new home often becomes something close to an obsession.

A good agent in the Internet era thus provides access to all of the relevant listings to their clients, and lets those clients choose the ones that are most interesting (which also removes one of the traditional complaints that consumers have had about real estate agents—that they only show clients their “preferred” listings, such as the agent’s own listings or properties whose owners are offering higher commissions); it’s only occasionally, when they feel that the buyer has overlooked a property or as a test to see if the buyer might be well-served by expanding their search to cast a wider net, that they will suggest other, specific, properties.

For some buyers, of course, an agent does need to be more proactive about suggesting properties; in A. C.’s case, though, the exact opposite appeared to be the case—where my automated searches were emailing her information on the latest listings once a day, she admitted that she was checking the listing databases online multiple times an hour throughout the day, and emailing me about new properties that she was interested in sometimes within minutes of those properties going on the market. As such a diligent searcher, of course, A. C. quickly noticed every listing that appeared in the areas that she knew that she was most interested in, so there was only one property that I suggested to her, and almost by definition it was outside her area of core interest, since I suggested it to see if she might want to expand her search to other areas.

As A. C. noted, then, the real value that I was providing came after she had identified homes that she was interested in. A. C. was buying during the height of the 2005 seller’s market in DC, and many other buyers during that period were putting in dozens of offers before getting one accepted; more often than not, the offers from buyers that were getting accepted were dangerously weighted to favor the sellers, with no inspections, no protection for the buyer if the home under-appraised or their loan fell through, and escalations in price tens of thousands of dollars above the asking price. With my guidance on how to draft her offers and my assistance in negotiating the terms, on the other hand, A. C. managed to get her third offer accepted, complete with home inspection, appraisal contingency, and lender contingency, and all at only $1 over list price.