Acquiring and owning real estate is a big deal for Americans. In particular, owning a home has been an American dream for millions of families across the nation.
Many of the more fortunate families will purchase homes and go on to buy vacation houses and investment properties as well. There is no denying that real estate ownership has created greater prosperity for many.
But not everyone benefits from the dream. Like all asset classes, real estate has cycles, and these cycles in part will determine how well the home or property performs as an investment — if it performs at all.
Talk to any real estate sales agent, and the mantra is always, “Location, location, location.” Rarely, if ever, will you hear a real estate agent discuss timing and advise a customer or client against making a purchase or sale.
Why? Well, the culture of selling real estate in our country was born in an era where the brokerages controlled all the information about properties available for sale. The consumer was a captive client who had to use the services of a brokerage to get the needed information.
That has since changed, and the information needed to make informed real estate decisions is readily available for free and from many sources. What remains today are the legacy bricks and mortar buildings, management structures and high overheads of the large brokerage firms. These firms have thousands of agents and must maintain high volumes in order to survive.
Training at many of these firms involves prospecting, finding buyers or sellers, and closing deals. All of these are important mandates that are necessary to run a successful real estate business, but at what cost? I say the cost can be a lack of unbiased advice.
Many real estate agents are simply salespeople and do not fulfill the role of a valued adviser. At one appointment, the agent may tell a prospect that it’s a perfect time to sell, and two hours later, the agent may tell another client that it’s a perfect time to buy. Well, which is it?
Obviously, there are more factors involved that take into account a client’s personal situation at that particular time. Sometimes, the real estate professional must represent a buyer or seller in less than ideal times, and he or she will work hard to get the best result possible.
That said, the real estate discussion should become something more than “Location, location, location” and doing a deal. A more comprehensive conversation should encompass a more unbiased, advisory role on the part of the real estate professional — especially if you want your purchase or sale to perform as well as an investment as it does as a home.
— Bill Masho is the broker/owner of Masho Associates. He can be reached at 805.895.4362.