What Is a Real Estate Neighborhood Expert?
Searching Google, here is the definition on the word "expert" from the online Merriam-Webster dictionary: "having or showing special skill or knowledge because of what you have been taught or what you have experienced."
Many real estate agents are trying to rein in the large areas they cover. They want to establish themselves as a real estate "neighborhood expert," or the "local expert" in their community. Some consider themselves the local expert in their subdivision or condo/townhouse association. Agents reducing their area of expertise to this kind of extremely specific, smaller area are probably the closest you'll get to a true neighborhood expert.
There is an agent I've read about in a popular real estate blog sharing website that only works in a one mile radius. She can walk to each of her listings. I would definitely consider her a neighborhood expert. She has established herself as an agent that gets her listings sold so she is trusted as a local expert for that specific area.
Then there are agents that consider themselves the local real estate expert for an entire village. This is where the term fits loosely, in my opinion. Now we're talking about multiple schools and districts, and specific areas within a village that can be completely different in income, home prices and other demographics. The larger a town is, the less "expert" one agent can be.
The bottom line is, the smaller the area, the more a real estate agent can be considered a neightborhood expert. Once their so-called area of expertise increases, the less chance there is that one agent can know everything about that town, unless they have a photographic memory.
For example, let's say an Orland Park real estate agent claims to be the neighborhood expert for all of Orland Park. How can they truly know everything about each school in this town of approximately 56,757 residents (according to the 2010 census)? They might have the skinny on the school(s) their own kids attended, but they can't know everything. School boundaries change over time and unless an agent keeps up with these changes with all the schools and district(s) in a town, how would they know?
I don't think a local politician knows everything there is to know about a specific town. They might know more than many of the residents, but they don't know everything. With that said, there are agents that live and work in specific areas that they know a lot about. They might not know every little detail about every school or where a new dog park might be in the works for, or what commercial building is going to be razed, but they know local real estate values. They're not all know-it-alls about their knowledge, and they might admit to not knowing the answer to a question a buyer might have, but they'll try to find out.
The Real Estate Article That Started This Series
I read a post contributed to Inman News by real estate agent and appraiser Hank Miller. He certainly stirred the pot with other agents that read his article. The gist of his post was how he felt so-called neighborhood experts were arrogant and weren't working in the best interests of their clients. He feels with readily available data, an agent outside of the neighborhood can come up with the same conclusions, and with less bias than a neighborhood expert. Some responses agreed with Hank but the majority did not, including mine.
Generalizations about a few bad apples
What rubbed me the wrong way were these statements:
"The “neighborhood expert” wants to remain noticed in their circles, and takes a listing and prices it to please the owner and others in the circle. Offers continue to come in below list, but the offers can be supported by market data."
My response - any agent that continually does this in a neighborhood is going to create a reputation as an agent that can't get their listings sold. What agent wants their sign out in front of a home for a very long time while other homes in the neighborhood get listed and sell within reasonable time frames?
Taking overpriced listings is a blog post in itself, but the statement above won't help any agent establish credibility and trust in the area. They won't be considered a "neighborhood expert" for long if this is their listing.
"The “neighborhood expert” becomes indignant with buyer’s agents presenting offers, and continues to ignore data in favor of their opinion. The neighborhood expert representing the seller continues to respond with, “Yeah, but …” and “The owner has X dollars into it. …”
My response - another blanket statement about the few inexperienced agents out there working in any area, whether they're local or not. Some agents make it "personal" when another agent questions the price, condition, etc. of their listing. Most agents keep it professional and don't bring emotions to the table.
"The “neighborhood expert” assigns blame, saying something like, “The buyers just don’t recognize the value … the market this and that,” and convinces the client that the agent is not at fault."
My response - same as above. This is an agent, local or not, blaming others for their lack of truly knowing the current market, whether it's in their local service area or not. My goodness, if the majority of agents overpriced listings then I could understand the reasoning behind Mr. Miller's tirade.
"The “neighborhood agent” can argue that they didn’t accept a “lowball” offer, and can continue to solicit business and say that they “know the real value” of the community."
Another generalization of an uneducated agent explaining their inability to truly know an area or how to read and correctly interpret the data that we have access to. When they cannot sell their listings they aren't able to back-up their claim about being a neighborhood expert. It will catch up with them.
An article written by a personal experience or two by the author?
I don't like it when an author paints a very broad picture that makes all agents appear to be doing something wrong, even if it's regarding a specific thing - like calling oneself a neighborhood real estate expert. As in any business, community, family, there are going to be people doing the wrong thing. We expect service providers to be knowledgeable and professional, but how does a potential client do their homework? Do they ask friends and family for referrals? Do they check things out online?
Real estate buyers are apt to use the first agent they meet to work with to find a home, based on several surveys I've read. Many sellers will interview more than one agent to get a feel for their personality and expertise.
Some buyers and sellers will call an agent that a friend or family member refers them to, and in most cases that works out. I get many buyers and sellers that didn't like their original agent for whatever reason and I've received many compliments about how different I am and how much they learn from working with me. These are clients that refer me to their friends, family and co-workers.
Yes, there are bad agents out there. But they're not all claiming to be local experts, which is why I had a difficult time with the article written by Mr. Miller. One of the respondents felt that Mr. Miller was writing this article from his appraisal business experience vs. his real estate business. Appraisers will run into agents that fight them on low appraisals. Maybe a few agents used their local expert status to tell Mr. Miller he didn't know what he was talking about when he delivered a low appraisal.
I use the tagline "Your Orland Park REALTOR®." I do not say I am the neighborhood expert in Orland Park, even if Chicago Magazine calls me a 5-Star Real Estate agent for Orland Park (2 years in a row now). I do live in Orland Park (technically I live in Homer Glen but I have an Orland Park mailing address since it used to be considered Orland Park until Homer Glen was incorporated) and my office is located in Orland Park, so I feel that I can truthfully say I am an Orland Park real estate agent.
However, you'll also see me say I'm your Homer Glen REALTOR® or your Palos Park REALTOR® or other towns that I specialize in because I've had 30 years of experience showing and selling properties in these southwest Chicago suburbs. I would never say "I'm your Hinsdale REALTOR®" because I've never shown or sold a home in Hinsdale (wish I did). And I don't self-anoint myself as your Orland Park Neighborhood Expert, even if I could.
I have stories to back-up how being a local neighborhood agent helped get and save my clients thousands
I'm going to break up my stories into separate series since this is already a long post and I feel each story stands on its own. I'll link them here as I write them.
I have nothing against Hank Miller. His reply to my 2nd response was well written, friendly and even complimentary (he didn't post a reply to my first comment). I just think he could have worded his article differently. I think it would have been better to tell some specific stories to back-up his experiences and admit that this happened with a few, select agents. He doesn't have to name names, but explain that his post wasn't about the majority of agents who claim they are neighborhood experts (and how many agents actually make such a claim - either in print or in person)?
Hank wrote one of those articles that garnered a lot of interaction, which is what blog/Internet authors strive for. Whether respondents agreed or disagreed, they voiced their opinions, and that was only because the article was worthy of putting our two cents into. I have to thank Hank for giving me the idea for this series.