Every few months, I get a call from someone who wants me to meet with them about listing their home, but they also plan to meet with the neighborhood expert who sells “most of the homes in the neighborhood.”
You probably aren’t surprised that most people think they will be better served by an agent who does a ton of business in the area.
But I bet you would be surprised that there is almost never an agent or company who does the majority of the business for a specific neighborhood or part of town.
To prove the point, I often run a report which lists every agent who has had a home sale in the neighborhood or area. It never fails that the top agents have a very small % of the market share and the vast majority of sales are by agents who had just one sale in the area.
Most Homes are Sold by Agents with Only 1 Sale in the Area:
I have a new listing that is coming on the market this week in the Shaw neighborhood in St. Louis City.
Since Jan. 1, 2009, there have been 55 home sales in the Shaw neighborhood. These 55 homes were listed by 44 different agents.
- #1 agent had only 4 listings (7% market share)
- 2 agents tied for the #2 spot with 3 listings each (5% market share each)
- 4 agents tied for the #3 spot with 2 listings each (4% market share each)
- 37 agents had 1 listing in the neighborhood (67% of the sales)
Let’s try a couple of other areas.
Brentwood:
164 home sales since Jan. 1, 2010 – listed by 120 different agents
- #1 agent had only 13 listings (8% market share)
- #2 agent had only 6 listings (4% market share)
- #3 agent had only 5 listings (3% market share)
- 101 agents had only 1 listing (62% of the sales)
Olivette:
110 home sales since Jan. 1, 2010 – listed by 81 different agents
- #1 agent had only 15 listings (14% market share)
- #2 agent had only 5 listings (5% market share)
- #3 agent had only 3 listings (3% market share)
- 69 agents had only 1 listing (85% of the sales)
Soulard:
35 home sales since Jan. 1, 2010 – listed by 26 different agents
- #1 agent had only 4 listings (11% market share)
- 2 agents tied for the #2 spot with 3 listings each (9% market share)
- 2 agents tied for the #3 spot with 2 listings each (6% market share)
- 21 agents had only 1 listing (81% of the sales)
Who are the Top Listing Agents in YOUR Neighborhood?
Or does it even matter.
There are a lot of questions you should ask before you hire a real estate agent, but how many listings they sold in the neighborhood might not be the most important question.
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{ 4 comments… read them below or add one }
An eye opener for sure. I tried to tell my dad this same thing. Hope he’s happy with the agent he found in Paducah.
People are always surprised when I run the reports. Even if there is one dominant agent in a particular subdivision, they typically only have 10-15% of the sales…that means that 8-9 in 10 are sold by someone else!
Hopefully your dad likes his agent. If not, let me know. One of the services I offer for free is to identify agents outside of St. Louis for people buying/selling elsewhere. I know the right questions to ask and can pick an agent that an insider would use. In return, if the buyer/seller likes that agent and closes on a house with their help, then they will send me a small referral fee at closing.
Win – win. I get a small fee for my consulting time, the agent gets a client and the buyer/seller gets a good agent.
Karen – Congrats on the inclusion in CoRE! Your blog is definitely deserving!
I wanted to just take a second and throw my extra two cents in… What I find to be interesting on top of these numbers is looking at the total listed compared with total sold. Of any agents, not just the “neighborhood experts,” of all the listings they took, how many did they actually sell and what was their original list to final sale price. This tells me some really interesting things 1) How effective are you at actually marketing the property 2) How right were you with your estimation of value originally. We all know that the longer the property sits on the market the more likely you are to actually sell your home for less than if you had it listed at the right price to begin with…
There any many questions that potential clients should be asking their agents, unfortunately many just don’t know which questions they are and too many agents steer the conversation to their “neighborhood knowledge” or the size of their company and not to their actual competence as an agent.
Eric – I agree completely. I do think that there are some agents who may take on more listings in an area than any other agent…and thus the neighbors continually see that agent’s sign. But, if the “neighborhood expert” agent only sells half of their listings or will price them too high just to get the listing (or because they don’t know how to accurately predict the price), then the seller may be better served by hiring an agent who doesn’t handle as many neighborhood listings…but sells almost everything they take on.