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The Six Types of Real Estate Agents And
Why You Don't Want to Deal with Five of Them

Abstract

With six types of real estate agents and five of them bad for your financial health, it's time to take a closer look at just who is selling real estate in America. The foreclosure crisis and the subprime lending debacle have raised concerns that a large percentage of real estate agents may not be fully qualified. When the largest purchase that most people make in their lifetime is their home, getting the best advice and guidance possible from a full-time professional is critical to avoiding serious financial pitfalls.

Have you ever wondered why there are so many real estate agents in relation to the number of homes for sale? In some communities you have more agents than listings and where I work in Incline Village we have more agents than the number of transactions that take place each year. With an average of less than one transaction per agent there is no way that every Incline Village real estate agent can hope to make a living. I started to question why there are so many agents, not just in the market where I work, but also why this type of agent overcrowding exists across America.

After looking at the sales statistics for the past few years and also following the lifestyles and vacation habits of the Incline Village real estate community some patterns started to emerge. I realized that you can't divide agents into just part-time versus full-time. There are much greater complexities in what motivates a person to become a real estate agent. It was through understanding these complexities that I learned there are really six types of agents: Full time professional, part time, seasonal, hobbyist, marginal and technologically challenged.

If you take a look at the six types of agents, only the first one, the full-time professional, is really serious about the business and well-rounded enough to provide you with the highest level of service. It takes a lot of time, effort and attention to detail to make a transaction flow smoothly from start to finish. Four of the other five types of agents have so many things going on in their lives that real estate is a priority only part of the time. And the Tech Challenged can be found either as a stand-alone agent type, or more often they share characteristics with one of the other five varieties. You can put two of the five varieties together and wind up with a part time/seasonal agent, a hobbyist/marginal agent, Tech Challenged/hobbyist, the number of combinations goes on and on.

So, when you think about it, only a full-time professional real estate agent has the current market knowledge, computer and technological skills, and business/negotiating talents to provide you with the complete package. The same way you would want the best surgeon operating on you, one would hope that you would also want the most qualified real estate agent handling your transactions. Would you trust going under the knife to a part time doctor who's not trained in the latest surgical techniques? Why would you trust your biggest investments to someone who is not a highly trained and full-time professional in the field?

It doesn't matter where in America you are buying or selling real estate, every market has been infiltrated by all 6 types of agents. If you call or walk into an office how do you know that the "floor agent" assigned to help you is a full time professional (FTP) and not one of the other types? They sure won't be wearing a badge to let you know and they are not going to reveal what type they are unless you ask the right questions. One of the reasons that so many long time professionals continue to build their business year after year is due to the referrals they receive. The FTP does floor time as a requirement of the occupation, it's not a big source of new business. So, the best way to find an agent is to get a referral to an FTP from a satisfied friend or relative. Even if you love gambling, just taking the floor agent assigned to you and never interviewing any other agents is really a crap shoot.

The next best way to find an FTP if you don't have a 100% rock solid referral from someone close to you is to research the market yourself and interview several candidates. Statistically, 77% of buyers and sellers use the first agent they meet and do very little research, if any. There seems to be a belief among the general public that all agents are alike, when the reality is the difference between an FTP and the other five types is enormous.

The number one responsibility of an agent is to protect the interests of their client.

Having an agent who knows your local market intimately and can negotiate strongly on your behalf is absolutely critical, especially when we are talking about the biggest investments of people's lives. A lot of the buyers who wound up with the scary adjustable loans and debt they can't handle didn't work with an FTP. Otherwise, they would have been advised very clearly not to purchase more house than they could afford or take out a loan with risky terms.

The buyers who save the most money and the sellers who get top dollar are generally the ones who work with FTPs. Working with one of the other 5 types puts you in the hands of someone who likely does not have as much expertise or current market knowledge as an FTP. Would you want to go into negotiations with a part-time / hobbyist on your side and an FTP representing the other party? Who is more likely to negotiate the better price and terms?

It's truly a case of buyer (or seller) beware when it comes to selecting a real estate agent. By taking your time to learn who the best FTPs are in your market and choosing a real estate agent who understands your needs you have the best chance of getting great representation. Each agent has their own attributes, personality and style of doing business. Do the research, interview several agents and find the one who's right for you.

Copyright March 2007 - Donald M. Kanare - All Rights Reserved