There are many things about the business of real estate that bother me. One revolves around agency relationships, and how agency rules actually often work against the interests of the consumer, but that conversation will have to wait for another day. The thing that bothers me lately is something that has always existed, but not at the pace or fervor of which it operates today. Like most things real estate, I blame the television brokers from the coasts who have pushed many bad concepts on the rest of us. Alas, in the world of real estate, it’s a copycat game and it should be expected that whatever ridiculous thing a television broker does will, indeed, find its way to the Midwest.
If you catch these shows, you’ll see the Realtors from New York flying to Miami to “represent their clients”. You’ll see the LA guys going to Palm Springs, or Santa Barbara, or Aspen, to “represent their clients”. The same people who boast that their local network and local knowledge are second to none (and that’s the reason to hire them) are galavanting around the country representing their clients in markets they know very little about. The paradox here is nothing short of spectacular. If local knowledge is the key to solid client representation, then how do these people fly to far flung locales to properly represent their clients? If they weren’t so stupid they’d be able to see the hypocrisy in their actions.
Recently, the Lake Geneva market is finding itself overrun with out of town agents and brokers doing what they see the big shots doing on television: attempting to work a market they know very little about. Long before the television brokers influenced the business of real estate, it was fairly common for Midwestern agents to hang a license in whatever state they winter in, typically Florida. They would sell a few homes in Wisconsin in the summer and then sell a few homes in Florida in the winter. This was a fine business model for the agent who hoped to sell a property or two to provide a little spending money for their winter holiday, but it wasn’t exactly a client first approach. How well could I know a market if I spend six months a year selling something else?
Lake Geneva is dripping with delicious sales volume and prices that are exceedingly rare in the Midwest. Because of this, agents from all over the Midwest have taken notice. If you’re a broker in Milwaukee who sells condo buildings in whatever Milwaukee calls their downtown, what exactly do you know about Club Unique? If you’re a broker in Hinsdale who sells in Florida and Hinsdale, what specifically do you know about the way steep slope zoning laws might impact the construction of a lakefront home in Linn Township? If you’re a broker who represents developments in Arlington Heights what insights do you have into the seven off-market lakefront transactions that I’ve closed in the past year or so? To the consumer the answer is painfully obvious, but the agents and brokers are accelerating the concept that a network is all that’s needed to properly represent clients in any given market. The desire to claim a share of a lucrative market overpowers any sense of reason, and that is to the painful detriment of the consumer.
I would suggest that 96% of my clients are from the Chicago market. I have sourced referrals in to the Chicago market for these clients, but I have never been tempted to snag a real estate license in Illinois so I could take part in my clients’ transactions. The reason I have abstained from this is simply because I know that I cannot properly represent a client in a market that I do not intimately know. I can understand Lincoln Park and Winnetka, but for all of the hubris I supposedly possess I cannot find it in myself to pretend to be an expert when I am not. I played tennis yesterday with a long time client of mine at the lovely Skokie Country Club. When I was done playing tennis I ate a quick meal with my client and drove home. I didn’t feel the need to pretend that I was somehow an expert on Glencoe real estate just because I spent an afternoon there.
I have a terrific idea for both agents and consumers. If you’re an agent, don’t pretend to know something about a market just because you have access to the MLS and a license in that particular state. It’s bad form. And if you’re a consumer looking to work with someone in a specific market, source an expert in that market. A local. Someone with heaps of experience and qualifications that match your aim. In the mean time, if you live in Burr Ridge and you’d like some help valuing a home you’re contemplating, don’t ask me. I’m a Lake Geneva expert, and I’m content for that to be the only market I know.