There are More Real Estate Agents than there are Homes to sell. What does this mean for You?

There are a lot of real estate agents out there.  According to First Tuesday Journal, there are 193,000 active agents in California.  People flock to the idea of making millions in the industry with the low barrier to entry, and the glam that is perceived on Bravo’s hit TV show, Million Dollar Listing Los Angeles.  However, as many of us know, there is still low inventory; much lower than there are agents.  This means that there isn’t enough business to go around.

So what does this mean for you as a buyer or seller?  It may seem like a good thing, knowing that you have a plethora of agents to choose from, but in fact I would be wary.  Here are three things to consider knowing the stats:

1. Some agents are going to make false promises on the price to get the listing: Your home is worth $1,000,000, an agent may say that it is worth $1,200,000 just to get the listing.  This is all too common.  Many agents will say whatever the Seller wants to hear just to get the listing.  When this happens, ask how they support this price.  This will especially be important because even if you get that price, if the buyer applies for a loan, the home will need an appraisal completed.
2. Some agents will not disclose facts until once in escrow if you are buying: This happened to one my clients before he started working with me.  The previous agent didn’t disclose material facts about a condo complex, and my client almost accepted the offer.  He realized after that dilemma and he fired him.  The agent wasn’t looking out for his best interest, but only the agent’s.  How to avoid this?  Make it clear to the agent that any information, good or bad, needs to be disclosed as soon as the agent learns of the information.  This includes even before writing an offer.
3. Are the agents pushy? That can be a bad sign:  It is one thing if your agent gives advice, but it’s another if they pressure you into accepting a bad offer or submitting an offer on a home you don’t like.  The agent is trying to make a quick buck, and is not looking out in your best interest.  Remember to keep as calm as possible and only make decisions you feel comfortable with. You deserve aggressive results not aggressive, blustering, and anecdotal stories without data.

There are some great agents out there; I pride myself on being client focused.  But when there are some agents that are desperate, you need to be aware of some of the signs of a bad agent who is just trying to make a quick buck.