Anyone who has ever sold a home for a commission knows what “farming” means.
In real estate, it has nothing to do with raising corn, wheat or dairy cows. Rather, it’s about cultivating a piece of turf where an agent seeks out homeowners willing to list their properties through him.
An agent’s “farm” is an area where he watches the market closely, targets direct mail and provides seasonal gifts such as a bottle of apple butter to sweeten a potential seller’s morning toast.
The advantages of engaging a local “farmer” to sell your home are obvious. After all, such a listing agent should be able to correctly peg your price and keep you closely abreast of rival properties in the neighborhood.
But realty experts say it’s equally important for a would-be buyer to engage an agent who specializes in the particular area where the purchaser is stalking the right abode.
“You want to get a buyer’s agent who knows the lay of the land and has a strong feeling for different parts of the same neighborhood,” says Robert Irwin, author of “Buy Right, Sell High,” a 1997 book from Dearborn Financial Publishing.
All too often, buyers engage otherwise acceptable agents who know little about the neighborhoods where they’re searching. There are clear telltale signs when an agent is working beyond his area of expertise. “If the agent needs a map to locate the neighborhood that interests you, you’re in deep trouble,” Irwin says.
Likewise, you should be skeptical if the agent showing you around has to grope for the names of the public schools that serve your target community, he says.
Take the case of Fred Libardoni, a broker-associate for the Re/Max realty chain who has farmed one large suburban community for 21 years and has sold some of the same houses there two or three times over.
As it happens, Libardoni was born in Paris. But he would no more agree to show homes to a buyer seeking a place in a suburb 30 minutes away from his office than he would accept a client searching for housing in a Parisian suburb.
“A good buyer’s agent knows his or her turf,” Libardoni says. “If he’s outside his farm, he’s not going to know the trends or what good properties are available in the market you’ve chosen. He’s not going to know the better parts of the neighborhood.”
“You have to have someone who works the territory,” agrees John Rygiol, the broker-owner of Buyer’s Agent, an independent firm now expanding to develop expertise in a wider range of communities.
To be sure, there is plenty of statistical information now readily available on both homes and communities across America and around the world. Finding the stone house on 620 Elm St. in the neighborhood you’ve pinpointed doesn’t take a masterful agent. Indeed, the Internet is currently so plump with home listings that you probably wouldn’t need an agent at all to learn the bare facts about 620 Elm.
But that’s not the point. A true “farmer” in the neighborhood surrounding 620 Elm knows more than the raw features of the stone house. He may well have already seen the home’s interior floor plan during a “preview tour” with agents from his office. That means he can tell you immediately whether or not 620 Elm has the ascending two-story entrance you’re seeking in a property.
By the same token, the true neighborhood farmer will know whether 620 Elm is on a street with drainage problems; whether it was constructed by a builder with a good reputation; and whether it is served by an excellent elementary school or a mediocre one.
Just as important, the true farmer in the neighborhood should have a good feel for price trends in that section of the community. He’ll be able to readily identify factors that are causing prices to rise or fall and help you predict whether investing there makes sense.
Here are three tips for purchasers seeking the right specialist in the region where they’d like to live.
– Ask telling questions of a prospective buyer’s agent.
Everyone knows there are tens of thousands of shopping malls and strip centers dotting the American landscape. But only a true specialist in a particular area could name and direct you to the closest regional malls.
If a real agent doesn’t pass this simple know-your-turf quiz, there’s good reason to be suspicious he may not be the most prudent choice to help you locate the best possible home in the vicinity, says Irwin. “It’s considered unethical for an agent to deal with a client outside his area,” he adds.
– Be wary of a well-meaning friend or relative.
With more than 600,000 real estate agents in the country, it’s no surprise that many home shoppers have a friend or relative in the business. But is your one-time college roommate or Aunt Betty really the best guide to making one of the largest investments of your life?
Maybe yes, maybe no. Your Aunt Betty could be the most congenial and competent real estate agent in the state. But if you want to buy in a suburb that is a 30-minute drive from Aunt Betty’s base, she’s undoubtedly the wrong agent for you.
The problem is that Aunt Betty doesn’t focus primarily on your area of choice. That means she’s unlikely to know about the freight train line or the commercial development that’s due to be constructed nearby. Granted, these facts could eventually come out in disclosure forms. But by then, you may have wasted a good deal of time and energy crafting an offer.
– Remember that agents are typically paid for out-of-town referrals.
You needn’t worry that if Aunt Betty refers you to another agent who works in your part of the universe that she’ll get no reward for her generosity. Chances are an agent such as Betty would be eligible for a referral fee representing 20 to 30 percent of what she would make had she found you a home yourself, estimates Libardoni.
Sharing commissions in exchange for referrals is a long-standing practice among real estate agents, Libardoni notes.
Anyway, your first concern in picking an agent should not be to make a relative or old friend happy but to select an agent who will lead you directly to the right habitat for the right price, says Irwin, the author.
