My Favorite Real Estate Movie
My favorite real estate movie, “Groundhog Day” (1993), actually isn’t even about real estate.
It’s a romantic comedy in which the suitor, played by Bill Murray, gets to perfect his courting strategy — courtesy of a time loop that causes him to relive the same day, over and over.
After various setbacks, his much-refined technique finally succeeds in winning the girl (played by Andie McDowell), who’s blissfully unaware of the time warp.
What’s that got to do with real estate?
In theory, the only way to definitively determine the best listing agent (representing the Seller) would be to rewind each transaction, letting a different Realtor sell the exact same house — under the exact same market conditions — and seeing who netted the Seller the most money.
Controlling for Two Variables
Of course, in the real world, nothing like that is possible.
The closest parallel is when Realtor #2 takes over an expired listing from Realtor #1.
However, as any Realtor knows, it’s much more difficult to re-position a home after it’s been languishing on the market than to sell it initially.
Six months or a year later, not only has the market changed, but invariably so has the Seller’s price expectations.
On the other hand, if you control for market conditions, by definition the properties will be different.
So, how do people decide which Realtors are the best listing agents?
My educated guess is that it’s a combination of factual and anecdotal observations such as: which Realtors handle the most deals (sales volume); how fast or slow their listings sell (“days on market”); word-of-mouth from past clients; and how well the Realtor presents themself in their marketing materials and listing presentation (a proxy for how well they market their listings).
All reasonable yardsticks, to be sure — but still subject to shortcomings and flaws.
Case in point: you’d think that a Realtor whose listings sold for an average of 95% of listing price would be “better” than a Realtor who’s percentage was 90%.
But at least some of that difference can be explained by how selective the Realtor is in the listings they accept (see, “The Serenity Prayer — Realtor’s Version“) or the areas they’re most active in.
Too, clients ultimately pick list prices — not their Realtors.
That statistic can also be skewed — upwards — by omitting expired or cancelled listings.
“Best” vs. “Most Popular”
Interestingly, the same apples-to-oranges problem bedevils efforts to rate the efficacy of individual doctors and even entire hospitals (i.e., their patient pools vary).
As a result, it’s undoubtedly the case that what often passes as the “best” Realtor (or doctor or lawyer) is in fact “the most popular.”
The bottom line?
If the Realtor is long-established, has a good reputation, and wows you with their listing presentation . . . it’s probably safe to assume that they’re a top performer.
P.S.: I remember asking a veteran electrician how a layman such as myself could tell who the best electricians were.
He rubbed his chin for awhile, then said, “Well, the really bad ones are dead.”