15 Secrets of Real Estate Agents
Real estate agents play a huge role in one of the most important financial decisions of our lives. When it comes to buying, selling, leasing, or renting, they’re the ones who shepherd us through a process that can only be described as overwhelming. We talked to a handful of agents across the country to learn more about the tricks of their trade—and in the process, picked up a few tips for you.
1. Criminals are bad. Kids are worse.
It isn’t just an urban legend that criminals will visit open houses to case them for a burglary. Colorado realtor Crip Erickson said these incidents happen in waves, and sometimes the crime has a super-specific target, such as prescription drugs in a medicine cabinet. Still, he said criminals aren’t the only ones to worry about during an open house. “By far the biggest problem are couples with young kids who don’t watch them,” Erickson says. “There’s been major damage done.”
2. When it comes to staging, they have plenty of tricks.
Chocolate chip cookie spray may be the cliché, but the realtors we spoke with emphasized music and interior design when getting a property ready to show. In addition to a little freshly popped popcorn, Erickson says he plays low key tunes that visitors won’t know (to avoid any bad associations with a certain song). Monica Webster, who works in New York City and Greenwich, Conn., says her musical accompaniment depends on the property: “If I have a 6 million dollar beautiful brand new build that's very cosmopolitan and metropolitan, I’m going to play different music than if I have an 1875 Old Greenwich house. It all depends.”
Webster says she also advises fellow agents to get dogs out of the house, turn the lights on ahead of time, make sure people walk through the front door instead of the garage, and depersonalize when necessary so prospective buyers can envision themselves in the space.
3. They can’t tell you if a property is haunted.
An agent or broker isn't allowed to “stigmatize” a property, which can include suggesting a house is haunted. Sellers and their agents must disclose material defects, but spooky happenings can be kept quiet. If you’re truly curious, neighbors are often a great resource. Erickson says he tells prospective buyers to Google a property and check the county sheriff's website for any news stories, criminal activity, or building permits associated with the address.
4. They’re on call 24/7.
In the wee hours, agents’ jobs are equal parts salesperson and therapist. “I’ve had lots of midnight phone calls with someone sobbing on the other end of the line,” Erickson says. Webster agrees: "I call myself a psychologist,” she says. “We’re in people's bedrooms!” Every agent talked about the difficulty of making people happy in the high-stress environment of finding a home. The word “compromise” came up a lot, and it applies to both the agent-buyer/seller relationship and among the buyers/sellers themselves. Erickson says that when dealing with a couple, he has them separately write down what they’re looking for in a home. “Sometimes they’re on the same page, and sometimes they’re not,” he says.
5. Tiny slips can cost them their gigs.
Webster detailed the process of finding out what buyers and sellers want and managing their expectations, which she says is the hardest part of the job. Keeping a seller happy can be just as important as perfecting a listing. Once, after a showing of a $10 million listing, Webster was fired for not calling the owner with an immediate report. “Our job is very intense,” she says. “We’re always on the front lines. Always.”
6. They see the extremes of human emotion.
Paul MacMahon, a realtor in Dallas, wrote to us, “We work with people in all stages of life, good and bad … Selling and buying homes is almost always an emotional roller coaster and we are there with our clients every step of the way. We talk to people when they're ecstatic, infuriated, excited, and defeated.”
7. They speak their own language.
Agents generally write the descriptions for their listings (although sometimes assistants or other members on the team will take on the task), and there’s a skill to crafting the perfect, limited-character sell. Erickson says a few things to look out for are “charming” (a.k.a. “small”), “cozy” (“a shack that’s about to fall down”) or “mature landscaping,” which often means there are dead trees that will need to be dealt with. Virginia agent Sarah Marchese adds that “potential” means it’s old and falling apart, “won’t last long” means it’s already been on the market too long, and “motivated seller” means it’s overpriced and any offer is good.
8. They need sales.
Most agents are independent contractors working under brokers and are paid solely on commissions, which means they only make money when a transaction closes. Agents generally make between 5 and 7 percent, and depending on the state, that amount goes to the listing agent’s broker or can be split between the buyer and seller’s agent brokers. Lease commissions vary, but they're usually between 40 and 100 percent of one month's rent.
9. They really do have to always be closing.
Given this financial structure, it’s no wonder agents will go to great lengths to secure a sale. Agents have seen it all, and done it all. MacMahon has one story of going the distance: “I once hiked down a mountain in Canada while trying to keep a deal from falling apart on the phone. It was getting dark so I had to use the phone's flashlight while I was talking. While I was talking to the other agent I heard my sister-in-law tell my wife not to worry, but there were bears on the mountain. I've had more relaxing vacation days.”
10. They want you to be prepared.
It helps if clients have done their homework. At the very start of the process, Webster gives clients a form outlining every step of the process to prepare them for what’s to come. Letting them know that it's important to get finances in order, determine a budget, and get pre-approved for a mortgage helps to set realistic expectations. (Most sellers won’t consider an offer without a pre-approval letter anyway.)
They also want you to know your limits. Both Marchese and Erickson say that one of the biggest real estate mistakes people make is trying to handle buying or selling on their own. Sellers often don’t know how to properly price their home and don’t anticipate the work involved in dealing with lenders, appraisers, attorneys, inspectors, and buyers.
11. Asking prices aren’t arbitrary.
Agents price a home based on comparable properties around the neighborhood and predictions about where the market is headed both on a grand scale and with the seasons. An agent will run a “comparative market analysis” which collects active listings as well as those pending or under contract and then evaluates things such as the age of the structure, renovations, lot size, views, and neighborhood.
Seasonal trends also affect sellers’ prospects. For example, Erickson told us things slow down after the Fourth of July when people begin to think about school starting up again and aren’t necessarily looking to move.
According to MacMahon, it’s about finding a sweet spot that maximizes the seller's profit. A property has to pass an appraisal report to get a mortgage approved. Banks won’t extend mortgages for sale prices that wildly deviate from appraisals, a policy that dooms many sales. Appraisals also help protect buyers from paying too much for a home only to discover they're deep underwater on their mortgage.
12. If you’ve found a property you love, handwritten letters help.
If a seller is fielding competing offers, letters, photos, or videos can sway their decision. These tokens of your affection for the property can distinguish your offer from the pack or simply allay sellers’ fears about what’s going to happen to the property once they’ve moved on. “The smartest thing I could do would be to tell a buyer: ‘Write a letter and say you’re not going to tear this house down,’’’ Webster says. Marchese wrote that she’s known sellers who have taken an offer based on a heartfelt note, even if it wasn't the best move financially. “Never underestimate the power of emotional attachment,” she wrote. “It raises its head in so many ways.”
13. But divine intervention can help, too.
Those aren’t the only tactics buyers can use to secure a property. Erickson says buyers sometimes contact the sellers directly—he doesn’t advise that path, but admits it can work out. Webster tells us there’s also a relatively recent superstition that sees buyers and sellers burying a statue of St. Joseph to help the process along.
Marchese wrote that she’s seen buyers “stalk” certain areas for listings, contact homeowners out of the blue to ask if they’d be interested in selling, and even submit backup offers in case a deal with another buyer falls through.
A few states away, MacMahon says the seller’s market in Dallas—mirroring many areas of the country—means that buyers are putting offers on homes, sight unseen, before they’re even available to the public. St. Joseph might have trouble overcoming those odds.
14. They’re not just selling houses.
Agents also have to sell themselves, and large portions of an agent’s business come from referrals and repeat clients. Many come to be known as neighborhood experts by moving a large quantity of homes in a given area, and that perception alone can be enough to get hired. Agents can also "farm" areas, meaning they choose a specific geographical area and target their marketing efforts there. When asked about the ever-present nicknames on “For Sale” signs (a la “Theresa ‘Terry’ Griffin”), Marchese wrote that it’s a way for agents to give off the air of a long-lost friend. Aside from investing in professional architectural photographers, sending out postcards, and networking, MacMahon says he’s also strategic about his online presence because he knows potential clients will do their research: “We're all small business owners and we have to be aware that we're our own PR firms.”
15. They don’t want you to believe everything you read on the Internet.
When Erickson meets prospective clients, he says his goal “is to try to establish a rapport so you don't come off as a salesman.” He believes that big real estate sites like Zillow and Trulia make people wary of agents because listings aren’t always accurate, and a simple inquiry can result in multiple realtors—often not local—contacting someone. “That process doesn’t work,” Erickson says. Marchese addresses the way the Internet has changed real estate with a slightly different perspective: “I think there is a big concern among agents today that, with the internet, our profession will become obsolete. But I think it’s only helping to strengthen the industry. The more informed people are the better we have to be at our job!”
Note: This article originally misstated that people bury statues of St. Anthony for good luck.