Buying

In Defense of Flipping

March 15, 2017 By Rick Jarvis

I am not sure when ‘flipping’ became a dirty word.

Not long ago, I was reading an article on flipping houses and when I reached the comment section, I expected to see ‘ooos’ and ‘ahhhhs’ over the new kitchen and restored fireplace mantel. But instead of positive banter and compliments on what was a really pretty renovation, I saw accusations of greed and cutting corners as well as several attacks on the flipper’s morality.

Honestly, I was little bit stunned.

Those who are the true professionals in the renovation/rehabilitation/flip world are essential to the long term health of the housing market and their contributions should be celebrated, not disparaged.

Flipping, renovating, rehabbing, improving, additions, wholesaling — whatever the word — they are all valuable and much needed services in all markets, at all times.

What is a Flip?

So what exactly is a flip? We wrote an article specifically to answer that question, but at the end of the day, there is no one definition.

The confusion over what constitutes flipping stems from both the flippers themselves (who often do a poor job of explaining the scope of their work), as well as a suspicious buying public who has heard the horror stories of shoddy workmanship that must be re-done post settlement.

Yes, it would be nice if the flippers did a better job of explaining what their version of flipping was and, yes, it would be nice if they all did the same things each time, but the variance of house condition, what price the market will allow, and flipper vision means that each flip is unique.

So if you are looking for a singular definition of the practice, you are going to be disappointed.

So Why is Flipping Important?

Repurposing our infrastructure is, in my opinion, absolutely critical to our future. Creating new infrastructure when we already have so much existing infrastructure to leverage is both financially unwise and environmentally irresponsible.

Why should we chop down more trees and build more interstates, when we have a perfectly well functioning road system serving vacant infill lots and abandoned homes?
Why build 1,000 more houses further from the urban core, all hooked up to NEW water and sewer system, when we have thousands of vacant or blighted homes already hooked up to a fully functioning water and sewer system?
And why move our population further and further from jobs, schools and shopping and increase our reliance on the automobile and gasoline?

When we renovate a home whose useful life is nearly over, we do so without adding a future tax and maintenance liability to our utility infrastructure. Each time we add 1′ of water line, sewer line, power line or interstate, we are simply adding to the tax burden that our children and our children’s children will have to carry. We need to do so with the greatest caution, not just as a default setting or because we feel it is easier.

Flipping as a Cure for Blight

Drive through any major city and you will find areas where blight is prevalent, often in proximity to areas with extremely high values. It is in these areas where values fall sharply that the flipping community often finds the best opportunities.

Charles Marohn of ‘Strong Towns’ gives a great talk about development patterns.

This is one of the best Ted Talks I have ever heard discussing our crumbling infrastructure and the reasons behind it.

No city wants blight, as it typically brings with it issues associated with a breakdown in the social fabric. And while the cities can offer incentives (Tax Abatement, Enterprise Zones, Historic Tax Credits) and try to create the correct environment for renovation, they can’t do the work themselves.

An active and thriving flipping community can transform a neighborhood more quickly than anyone. When the flippers arrive en masse, they not only bring the dilapidated homes back to life, but the commercial corridors that often border them. When a community has a healthy economy within its borders — jobs, commerce, retail, entertainment — to compliment a stock of recently renovated homes, it is the greatest defense against abject and systemic poverty.

What About Gentrification?

‘Flippers just cause house prices and real estate taxes to go up and force people from their homes,’ is another argument I often hear against flipping.

Affordability is a real issue in most cities, but so it a stock of safe and secure housing. And, yes, flipping and gentrification are not always the best of friends.

But despite the fact that the two may seem to be at odds, the two do not need to be mutually exclusive.

Gentrification is a challenge and when a long-time population begins to be priced out (or taxed out) of their homes, no one wins. But renovating homes responsibly and according to today’s building codes is expensive, too. There is no easy answer.

Know that flippers tend to have a great feel for the market and know when to push values or renovate more affordably. And when they do their job correctly, they serve to be one of the best solutions to a very difficult problem. If there is any group of individuals who are qualified to straddle the line between affordability and responsibility, it is the flipping community.

Summary

Am I saying that we should never build another community in suburbia? No.

But am I saying that we also need to focus on putting our existing stock of neglected housing back to work for us? Yes, I am.

Flipping, in all of its forms, is important to health of our region. Despite the occasional story about flippers who cut some corners or maybe don’t fully disclose the scope of their work, the art of renovation has helped make Richmond a far different city than it was only a few years ago. And to that end, I applaud what they are doing.

If you are considering purchasing a ‘flip,’ do your homework. With the proper vetting and correct expectations, a flipped home can be a wonderful option.

The ‘B Word’ — Bubble

March 12, 2017 By Rick Jarvis

I’m beginning to hear people whisper the dreaded ‘B Word’ again …

Trust me, I was front row center in 2008. I lived it — and I do not want to live through that period of time ever again. When the market collapsed in the summer of 2008, it was like someone just threw a switch and everything stopped. Phone calls and showings went to nil. Loans got denied with no real explanation. And the worst part was that no one really knew what to do.

For the better part of two years, I felt like I had to apologize to panicked sellers who, much like myself, understood neither the reason it had all happened nor when it would all end.

And it was not until well after the fact that the reason the real estate machine stopped became evident.

When the Bubble Popped

when the dust had finally settled, the majority of our marketplace had lost between 20 and 40% of their housing value.

In retrospect, we were all unknowingly playing a giant game of musical chairs. But instead of removing one chair each time the music stopped, someone removed all of the chairs at once — leaving everyone to fight for a place that no longer existed.

The banks had stopped making loans entirely and the market seized up like a Maserati that had lost its oil. It doesn’t matter what asset you own, when no one wants to buy it, it has no value.

Depending on the type and location of your home, the majority of our marketplace lost between 20 and 40% of their housing value. And no one was immune — first time homebuyers, new homes, luxury homes, condos — they all suffered similar fates.

Is There Another Price Bubble?

Markets in high demand where inventory is constrained (i.e. -- urban areas) have actually surpassed values from 2008

So when I hear the word ‘bubble’ being tossed around today, I cringe a bit as the circumstances that led to the hyper-appreciation of 2005-2008 are nothing like the ones that are causing the rapid rise of the values currently.

But since most people tend to focus on price, lets begin there.

Yes, pricing is up substantially from the bottom in 2011.
Yes, pricing has spiked each spring.
Yes, it feels a bit like 2007.

And no one is feeling the pinch of the spike more than the first time buyer, but that is a different article for a different day.

Falling from a high of approximately $260,000 to just above $200,000 in 2011, the average house price in the Richmond region lost 23% of its value, although not each type was affected similarly.

— Newly built properties with every imaginable upgrade, especially ones located 30 minutes or more from the urban core, were most impacted.
— Reasonable housing in established neighborhoods underpinned by the best public schools were impacted less.
— Quality urban housing near public transportation and walkable amenities — and where new inventory is difficult to add — was impacted the least.

So where are we now? When you look at the sub-markets individually, a clearer picture emerges.

— Markets in high demand where inventory is constrained (i.e. — urban areas) have actually surpassed values from 2008.
— Suburban markets that are 30 minutes or less to the urban core are almost back to the 2008 valuations.
— Markets outside of the 30 minute commute are still off from 2008 highs.

The takeaway here is that each market is more localized than ever before and even segments within very short geographic distances from one another will likely behave quite differently. Buyers and sellers need to be careful when trying to apply anecdotal evidence from one market to another without understanding the underlying inputs.

If you expect Midlothian to behave like the Museum District, or Crozier to behave like Church Hill, then you are probably in for a bit of a surprise.

Lending and Homeownership

we increased the buyer pool by not only decreasing the credit standards required to qualify for a mortgage, but the equity required to make the down payment

So lets talk about the state of the mortgage market right now.

Between Dodd-Frank, the collapse of the mortgage insurance industry, and the realization that housing values don’t always go up, the mortgage industry of today looks little like it did in 2008.

Adjustable Rate Mortgages

According to the Federal Reserve Bank of NY, adjustable rate mortgages were nearly 40% (38.5% to be specific) of the mortgage market in 2005. By 2015, that percentage had fallen to just over 5%.

Effectively, 95% of homeowners today will have the same mortgage payment in 2, 5 and 10 years (or more) versus 40% of the market that a mortgage payment that doubled in a 2 to 3 year span before the bubble.

Mortgage vs Income

And check this out: As a country, we now spend far less of our collective incomes on housing, at least in comparison to the period before bubble popped.

So fewer people own houses and they’re using less of their disposable income to do so. That feels healthy to me.

Homeownership Rate

Furthermore, look at how few homeowners there are now compared to 2008.

Homeownership peaked just before the crash and fell to levels not seen since the 1960’s. This implies to me that those who own housing are more qualified to do so and those who do not have the credit, income, or equity to own are electing to remain renters.

Equity

And finally, how does equity in housing look? Much better than only a few years ago.

Credit Standards

Beginning in the middle to late 1990’s, we increased the buyer pool by not only decreasing the credit standards required to qualify for a mortgage, but the equity required to make the down payment. We then artificially dropped the monthly payments to allow those with lower incomes to qualify by giving buyers adjustable rate mortgages where rates sometimes doubled only a few years into the loan.

The system was doing a phenomenal job of artificially creating more buyers — unfortunately, the buyers being created were the riskiest type and the ones least able to withstand a market adjustment. And while more buyers equals more demand and more demand equals higher prices, when the music stops, buyers on the fringe go away. When a highly leveraged market adjusts, really bad things happen.

Fast forward to today — according to Core Logic, the quality of the mortgage credit issued was at it highest since 2001.

So until lending standards allow for the marginally qualified buyer with little to no down payment to enter the market in droves, the likelihood of a 2008-eque bubble remains extremely low. And currently, the buyer credit profile demanded by Fannie Mae, Freddie Mac, and FHA remains far more strict than the loan products so prevalent in the pre-bubble days of 2005-2008.

Inventory

Since 2008, the supply of houses has dropped from roughly 10,000 to just over 3,000.

If you talk to any industry professional about the market, the word ‘inventory’ will be used repeatedly and usually in conjunction with words like ‘crisis’ or ‘lack of’ or ‘we need more.’

See the chart below to get the full impact:

Since 2008, the supply of houses has dropped from roughly 10,000 to just over 3,000.

That is insane.

And when you look at the markets individually, you get an even more pronounced effect:

The Fan District and Jackson Ward had over 300 active properties in February of 2008. There were 30 in February of 2017.

Is ‘insane – er’ a word?!?

The bottom line is that the difference between the pricing increases heading into 2004-2008 and those in 2014-2017 is much more about a constrained supply than an abundance of marginally qualified buyers showing up with highly leveraged adjustable rate loans.

Housing Starts

the tight supply conditions are not going to be solved by new construction.

So how do we solve the inventory problem? By building more housing, of course. All we need to do is get those builders to crank it back up and start building like 2006 again. If we can get the inventory levels back in line with say, 2000 or so, then everything should be fine, right?

Not so fast. Look at this:

I don’t know about you, but this doesn’t appear to be a market that is supplying too much housing to itself, does it?

Why are we not building more? Is it builder confidence? Material price increases? Building codes? Banking? I’m unsure, but housing starts don’t appear to be adjusting to keep pace with demand and are still below historical norms by a significant amount.

At least in the near term, the tight supply conditions are not going to be solved by new construction.

So No Bubble?

what we have been experiencing in adjustment back to trend

I’ll go ahead and say it — No, this is not a bubble. As a matter of a fact, we are still in the throes of recovery.

[ But if you would like to read some differing opinions, here you go … ]

Are we going to have continued years of 5-7% or more appreciation in the market? No, I do not believe we are. Interest rates are beginning to rise and housing prices in many markets are already causing affordability issues. So no, do not expect to see prices continuing to rise unfettered for the next several years.

Remember:

We have anywhere from 60-90% less inventory than we did in 2008
Pricing is only now approaching 2008 levels
Homeownership is still at 50 year historic lows
Housing starts are down significantly
And the dangerous adjustable rate mortgage is a very small part of the market.

It is not 2008 all over again.

Yes, if you entered the market in 2012, then all you have seen is rapid appreciation. But in reality, what we have all been experiencing is adjustment back to trend. And yes, if you are a renter trying to enter the market, it feels extremely frustrating to see multiple offers on the houses you want to buy and contract prices being bid well above the asking prices. But just because there are bidding wars — just as in 2006 – 2008 — does not mean it is a bubble.

So What Could Cause Another Bubble?

The severity of any potential adjustment will be tempered by the fact that inventory is low and credit standards are far more in line with historical norms.

Could something else derail the housing market? Absolutely.

Rising interest rates are the obvious threat, but so is the potential dismantling of Fannie Mae and Freddie Mac. And we should not discount our friends at the Federal Reserve, either. They totally missed on the last one and are probably hyper-sensitive to finding a new one. If they decide that they think there is a bubble and begin to take steps to stave it off, they could probably cause the very adjustment they fear.

And then there is Wall Street. Left to its own devices, it could figure out a way to game the system again. But at least for now, I don’t see their fingerprints on predatory lending like I did a decade ago.

And if it isn’t the Fed or Wall Street, it could be our elected officials in Washington DC. While Wall Street takes a lion’s share of the blame for 2008, DC deserves as much, if not more, for putting it all in motion. May argue the real roots of the crash begin in the early 1990’s with the rewriting of the Community Reinvestment Act. Is the CRA a direct cause or more of an unintended consequence? Probably a bit of both.

Regardless, as 2008 so powerfully demonstrated, the nation’s lending practices are the primary driver of housing values. Both government, at all levels, and Wall Street are inexorably intertwined with housing. If rates spike to 10% or suddenly the 30 year mortgage is no more, then yes, prices will adjust and it will be painful. But the severity of any adjustment will be tempered by the fact that inventory is low and credit standards are far more in line with historical norms.

Lets Tap the Brakes on the ‘B Word’

So before we start dropping the ‘B Word’ on the housing market, lets make sure we pull back the curtain and look at the cause for the recent price increases. Those who predict doom are all eventually correct.

Here is what to watch for:

When you begin to see a bevy of new ‘Mortgage Insurance’ companies enter the market, make a note.
When you begin to see 1 year adjustable rate mortgages being used, especially for first time homebuyers, start paying closer attention.
When you begin to see the ‘interest only’ mortgage product being offered for long term purchases, get nervous.
When you begin to see loan products that offer 100% or more leverage, get really nervous.
When you see homeownership levels approach 70%, you might want to put some cash under your mattress.
And when you see the 125% loan product make it back into the lending lexicon, hunker down as it is going to be a long winter.

For now, we are safe, at least in comparison to 2008. Something else might get us but just know that none of the root causes that almost killed us all in 2008 exist currently.

The Emerging Desperation in Buying

January 30, 2017 By Rick Jarvis

In the past several springs, the market was pretty insane — full price offers in hours, multiple contracts, bidding wars — and do you know what? It is coming again.

While an insane spring market is not overly noteworthy (the springs are always busy), it is the intensity of the insanity that is worth mentioning.

And it’s getting worse.

The inventory issue

This is the least balanced market since the 2008 - 2010 market, albeit in the reverse ...

Each of the past three years, the market seems to begin earlier and become more focused on the months of February through May. See the chart below and look at how much of the transactional volume is being done in the front half of the year.

And then notice how each spring has gotten worse. In April 2014, 1,700 contracts were accepted by sellers. In April 2016, the number jumped to nearly 2,300 — which is an increase of 35% in a two year span.

Okay, so we’re expecting more people to buy earlier this year than last. Whats the big deal, you ask?

Well, when you layer on the inventory issue, demonstrated in the chart below, the issue comes into focus more clearly.

The bottom line is that substantially more people are buying, but there are substantially fewer houses to go around.

The number of people seeking housing in a market becoming increasingly starved of options is contributing to our least balanced market since 2008 – 2010, with the exact opposite scenario.

Buyer desperation abounds

Recently, we have begun to see many more instances of home seekers running ads, canvasing communities, and otherwise announcing that they are looking for houses in specific neighborhoods and trying to intercept the home before it comes to market. I have heard of people looking for ANY indication of a potential listing (painting, landscaping, photographers, PODS, and even Realtors’ cars in the driveway) and soliciting sellers with offers in an attempt to find a home, especially in the most inventory constrained neighborhoods.

Personally, I think it is a dangerous development.

First, a disclaimer: I recognize that, as a Realtor, of course I would not like to hear about buyers going directly to sellers to purchase homes. So anything I say from here needs to be filtered by the fact that I am an agent and any ‘agentless’ transaction undermines my existence.

A word to sellers

Disclaimer aside, instances where a buyer directly approaches an unrepresented seller, especially in a hot neighborhood, and pays anywhere near market value are pretty much non-existent. The entire reason that a buyer is walking around and trying to find a home to buy is that they don’t want to pay market value for the home and are trying to intercept the home before it becomes publicly available.

The same competitive pressure that drives price also drives terms...

Don’t anticipate that the value you can command for your home has been set yet. It has not. When exposed properly and demand enhanced (as all good agents know how to do), you will get at least market value for your home, if not more. Selling a home before exposing it to the market leaves money on the table.

It is also important to note that your typical residential contract has about 3 paragraphs dedicated to price and about 10 pages dedicated to terms. The terms of a contract are hugely important in shifting risk from one side to the other. A contract with a good price and weak terms is not a good contract. The same competitive pressure that drives price also drives terms.

Yes, the allure of selling your home direct and saving the commission are strong, but the savings are fool’s gold when compared to a properly marketed home where competition is high.

A word to buyers

Well over 90% of the homes that are transacted flow through MLS ...

As a buyer, when you don’t involve an agent, you risk of missing the largest source of homes for sale; the MLS. Does the MLS have every available home in it? No. But by most counts, well over 90% of the homes that are transacted flow through MLS and alienating those who curate housing availability information (Realtors) is a poor strategy.

As an agent, when I know that a buyer is also attempting to go direct to a seller and not include me, I will reallocate my time to finding housing for clients who have officially engaged me in a formal advocacy role, and I am pretty sure I speak for my peers on this issue, too. Simply put, we’re going to work with those who want to work with us.

Buyers, you are more than welcome to approach sellers directly, but when you do, you cannot expect that the agent community will put you in front of the clients with which they are formally engaged.

We are frustrated, too …

If ever there was a time to involve a pro, it is now...

There are many more reasons over and above the ones discussed above — lending best practices, client-friendly contract structures, appraisal management — but we will save those for a later date.

Just to be clear, I am not arrogant enough to suggest that if you don’t use a Realtor, something bad will happen. Frankly, going direct might work for both parties. But the likelihood of a positive outcome is far lower than the tried and true, century old method of transacting a home.

As agents, we fully recognize the extreme market conditions. And much like yourselves, we are as frustrated with the inability to make the perfect home appear as much as you are. But if ever there was a time to involve a pro, it is now.

Being able to secure the perfect home involves using all of the existing resources and databases, especially given today’s skewed balance. Find an agent who is diligent, hustles, and understands how to write a winning offer in a competitive offer situation, and you will have found the best way to navigate the market conditions that will define the 2017 spring season.

We Are Moving!

January 29, 2017 By Rick Jarvis

OK — we’re moving.

It has been over a decade since the last time we moved — which for us, has been an eternity.

For those of you who know our history, we used to be serial movers. From 1995 to 2003, we owned and lived in 5 different homes in various areas around town. We’ve built two, renovated two and bought one just like it was.

Perhaps it was ease, or perhaps we craved the stability or perhaps life just got too busy to move, but for whatever reason, we have stayed put in our current home longer than at any point in our lives.

But now it is time to move as 2 of 3 kids are in/soon to be in college and our preferences have changed.

How Did We Do?

And so as we are spending some time renovating our new home (on 13 acres, mind you!), we are reflecting back on the decisions we made when we built our current home.

Knowing what we know now and with the benefit of hindsight, how would we grade our decisions of a decade ago? I think we deserve an A minus — not too shabby.

What We Did Well

We maximized our space, for sure, and in efficient ways.

When we built, we added an unfinished basement and an unfinished third floor — both of which we eventually finished to add more space for our growing family. The extra space has been probably the primary reason we were able to stay in place for so long.

We also chose a somewhat subdued exterior elevation, at least relative to those that surround us, that I think has aged well. The residential architecture look of the early 2000’s was largely ‘transitional’ (think — ‘contemporary colonial’ with an open interior layout.) Hopefully, by choosing a less polarizing exterior, our appeal will be more universal when the ‘For Sale’ sign goes in the front yard.

I also think we did a good job on the interior plan, too. Our plan is open and flexible. And while it does have a rarely used living and dining area, these rooms are a relatively small percentage of the overall first floor space.

What We Did OK

Our lot is larger than the average lot in our neighborhood and on a cul-de-sac, but it is oddly shaped. I think we could have done a better job of clearing the lot because it makes our oversized lot seem a bit smaller than it actually is.

The powder room is centrally located, not tucked away. I think a powder room that is a little more private is preferable.

And while we added a mudroom that was not on the original plans, it turned out we used it far more than we would have ever anticipated. If we had a time machine, we would make the mudroom about 2x the size we actually did.

What We Wish We Could Do Over

We missed on having a pedestrian door in the garage, and that has been a bit of a pain — wished we would have thought of that during construction.

And while we have a screened porch, it is elevated as our lot has some slope. The ability to engage our backyard is a bit challenged and if we had to do it over again, we would create a better relationship with the back yard.

Final Grades

So when we look back at our choices, I think we did pretty well, especially considering that life is inherently unpredictable and what you think you think is not necessarily how everything will all work out.

The home has served us nicely for over a decade and not been a burden on us financially. The public schools in our section of town are highly rated and we feel our children have been served well by the schools.

And as agents who travel the entire Richmond Metro constantly, the I95/I295 Interchange has made our varied and random travel patterns minimally impactful to our lives. So we not only have enjoyed the home itself, but its location proved to be perfectly suited to our lifestyle.

Would we make some changes to what we did if given the chance to do over again? Yes. But by and large, our 2017 selves would congratulate our 2004 selves quite hardily.

Did You Just Hire a Realtor, an Agent or a Salesperson?

January 19, 2017 By Rick Jarvis

I wish to start this article out with a disclaimer — This is my opinion only and I do not speak for anyone else. I also know that these comments will probably generate some level of disagreement with those in my industry and I am OK with that.

So here goes…

My industry is filled with three types of people

Realtors
Salespeople
Agents

Lets discuss the differences.

The Realtor

Technically speaking, a REALTOR is a member of the National Association of Realtors and is licensed either as a broker or real estate salesperson. A Realtor will (ok, should) always abide by the Code of Ethics and is versed in all of the complicated agency, disclosure, and fair housing laws as well as the protocol for how to handle the inevitable grey areas that lie on the edge many sticky situations.

I have been involved in many deals where the cooperating broker, a Realtor in the purest sense of the word, spent more time on protocol than they did on the analysis of the market value. Their client, in my opinion, made a poor financial decision.

That said, I have also been involved in deals where the cooperating broker spent very little time on the technical part of their craft (the Realtor side, if you will) and put their clients at risk.

It cuts both ways.

Understand that in no way am I criticizing being a ‘Realtor,’ rather I am simply pointing out a Realtor (once again, in the purest sense) sees their world and the conflicts that comprise it through the lens of very a strict interpretation of proscribed rules and guidelines. Sometimes this protocol focus ignores the larger picture.

It is unfortunate.

The Salesperson

In the real estate industry (or any commissioned sales industry for that matter) there are sales gurus.

Attend any Mike Ferry Organization or Brian Buffini seminar (or Matt Ferrara, or Ben Kinney, or any other one of many and, in the interest of full disclosure, I have paid to see them all) and you will hear their ideas on how to make more money.

All of the scripts, activity goals, scheduling, etc. are all designed to increase the attendee’s earning potential.

Usually, a combination of increased people skills, basic scripts, and a diligent commitment to prospecting for new leads (via calling people you know and/or those you do not) should lead to increased income. Their (correct) theory is simply if you find more people to talk to and do a better job of telling them what they want to hear, you will increase your income. More opportunities x more skills = more income.

But at who’s expense?

The true salesperson, while they are doing nothing illegal or even immoral, hold their own ‘lead generation’ activities in the highest regard. Many times the teachings of the sales guru strongly suggest to NOT take any phone calls other than those related to prospecting for extended periods time each day. Closing issue? Call you back at noon. Termite not ordered? Please leave a message. Loan package is wrong? I am sorry, but Mr. Salesperson is busy right now.

Needless to say, it is not a client-centric philosophy.

Am I saying you should NOT hire the salesperson? No. I am saying that don’t be disappointed when your salesperson acts like one.

When the metrics of deal count and sales volume become the sole measuring sticks of success, then the advice offered must always be questioned as to who stands to benefit most.

That said, I have always found that those who are busy are usually busy for reason –– they are good at what they do. I have also found that a certain level of detachment and objectivity from my advisor comes from a certain level of financial achievement. Much of the best advice I have ever received came from folks who had little need for my business. Any advisor who needs my business, well, I am not sure their advice is best for me, either.

While the advice from the true salesman should be filtered and vetted, it is many times very accurate and based on a great deal of experience.

The Agent

The agent is a combination creature who is part Realtor, part salesperson, and part trusted advocate. Agents get deals done.

An agent, in my opinion, has a loyalty to the correct outcome for their client.

Agents may be very aggressive and disciplined in their lead generation practice (like the Salesperson) but still hold their client’s interests above their own. Agents fully understand the Realtor Code of Ethics (like Realtors) yet manage to adhere to these principles without getting in the way of the best outcome for the client.

At the end of the day, an agent will always try to help their client find the best available deal through the best available means.

An agent always asks themselves, is my client making a good decision? If they are making a bad deal, then they will try to talk them out of it. If they are making a good deal, they will try to keep them engaged in it –– all of the while conducting themselves in a manner consistent with the Code of Ethics.

They likewise are successful enough to be able to give competent advice without their own financial pressures influencing the recommendations.

Conclusion

I think it is pretty obvious by my tone that I feel the best person to hire in a real estate transaction is the AGENT. A good agent, like a good attorney, accountant, insurance broker, or mechanic, is someone who will be in your life for a long time. I know that those clients who consider me their ‘agent’ call me constantly with questions as mundane as ‘do you have a good leaf guy’ to as complex as ‘help me understand the legal aspects of non-compliance in a mandatory HOA.’

The all-time great speaker Zig Ziglar once said (and I paraphrase) that if you help enough people get what they want, you will always be taken care of. There is a lot of truth in that statement, especially in the real estate business. The ‘agent’ community in Richmond contains a great deal of talent whose ability to positively impact a transaction is robust.

Interview many and find the one who you would consider putting on your team for life.