It is very interesting that just as consumers are demanding ever more hyper-local content and knowledge from agents that we are also seeing another distinct trend in the opposite direction: the tendency to list and sell to larger and larger geographic areas.
The contrast between old-school hyper-local agents and the newer nomad agnet was driven home to me while I was working with two listing agents who still work exclusively in small niche markets. I was at a closing with one of them and she implied that since I had the entire city of White Plains to cover, why didn’t I simply refer out the client who finally bought in Scarsdale?
I knew that the attitude about staying hyper-local is alive and well though it appears to be a staple of old-school real estate. Still, I was more than a tad surprised. Scarsdale is not the moon. It is the town directly adjacent to the west side of White Plains and about a whopping six miles from my front door to the center of the village. If we followed this line of thinking to its most extreme would mean that a buyer potentially moving from New York City to Westchester NY would have to have as many as five or six agents to explore all the possibilities open to them that were within about 30 minute commute. For the consumer this seems most unwieldy if not highly impractical. Could you imagine the mountain of agents all crawling over each other for the buyer’s attention? What a mess. Not to mention a monster of coordination.
From the agent’s perspective, there could also be a danger to being too local. What if something happens to that small segment of the market you represent? If your geography/price range are razor thin – you are setting yourself up for trouble. This was clearly seen this year when agents who specialized in small high-end markets got creamed because jumbo loan issues bit them in the backside. Another listing agent I encountered was used to selling about 10 major properties a year – but this year had only managed a single sale.
On the other hand, we have the opposite trend. I’m seeing this from the listing side. There are a cohort of listing agents that are increasing their range to encompass as many as five counties. These agents list in such a wide ranging area that I refer to them as “Nomads.” (Please don’t yell at me if you are from a rural region. I am speaking from a local perspective in a densely populated area.) Densely populated areas tend to have more gyrations in market conditions per square mile than more rural locations. The number of towns, cities and villages with their local governments and school systems within Westchester County alone is daunting enough. Market nuances that can seriously impact home values would be a black box to an agent that is overextended geographically. I have to question whether this is in the best interests of the seller. Let me put it this way: If going to each listing once a week would entail a gasoline bill that looks like the national debt – I submit that you are probably trying to cover too much ground and that this could seriously impact the result to the client.
Why do I say this? Well, I’m a numbers type of person, and I started looking at the raw numbers of agents who cover large territories and found a disturbing trend. I will give the caveat that this was not totally scientific. I looked at a handful of agents randomly. Still, the results from my informal survey were pretty compellling. When comparing solds to expireds and cancelleds, the ratio of closed sales to listings was consistently under 50% . 35-45% success appeared to be the norm for the Nomads whereas anything from a 55-90% success rate was the norm for those who stuck closer to home. To be fair, I chose not to include expired or cancelled listings that the agent re-listed. Nor did I include sales listings that wound up as rentals. The further the range, the lower the actual ability to close the sale.
Now, as a business model, being a Nomad might make sense. It’s probably exhausting to service so many listings that fail, but many businesses are based on throwing as much up against a wall as they can to see what sticks. It can be profitable to work that way.
But what about the seller? For the seller, listings that just won’t sell are like beating your head against a wall – it feels so good when it finally stops.
Personally, I take a line right down the middle of this controversy. I have too many buyer clients who want one-stop shopping to limit myself to one town or community. Therefore, with respect to buyers, I cover pretty much the bottom half of the county. With listings, I have traditionally stayed closer to home. However, I am gradually extending my listing range to also encompass the lower part of the county. When listing opportunities arise in areas where I have not taken listings previously, I generally choose to work with a co-listing agent who is experienced with respect to the neighborhood in question. In that way, I have started to expand my territory while retaining top service for my clients.
© 2010 Ruthmarie G. Hicks, https://thewestchesterview.com All rights reserved.
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