Is Your Austin Realtor a Beta Test or a Production Version?

I was evaluating some Property Management software recently, which was still in the “beta” stages of development. Beta software is commonly thought to be ready enough to function, but is expected to have undiscovered bugs and flaws, and may not be ready or stable enough for production use. I decided against this particular software because it has shortcomings and limitations I cannot live with.

I started thinking of some of the many past encounters we’ve had with what I would call “beta version” Realtors. These are freshly minted, green agents who have passed some testing requirements, such as passing the real estate exam and completing basic training classes, but have not yet been proven as stable and reliable in a “production” environment.

Now all they need are some beta testers. Like beta software, many of these beta agents will never achieve the level of maturity and stability required to move into full production release status. They’ll never become Version 1.0. But they will be tested by some users (clients), with varying results, before the market spits them out. Some will pass the test and become great agents, but they still have to be tested first.

Will that beta tester be you? And is it a good idea to use a Newbie Agent to help buy or sell your home in Austin?

All things being equal, I think most people would be better served by an experienced, market proven agent, but that doesn’t mean you can’t be well served by a newbie. We’ve done quite a few deals with brand new agents and, in many case (but not always), they do a pretty good job for their client, even if it’s their very first deal.

The common elements present in a good “beta” agent are that they are careful, detail oriented, willing to listen, and they have a Broker who is actively mentoring or supporting them on the other side of the deal. In other words, they are a new, but very well developed and supported product.

It also helps if the particular deal we are working isn’t one in which some of the tougher problems and issues arise. But we’ve had a few very tough and complicated transactions with new agents on the other side, and they survived and will be better agents for the experience. New agents usually also don’t have any other deals going on, so they can stay focused and on top of things (provided they are that type of person to begin with). They are so excited just to have a deal going that they are fully engaged and available to the transaction and its participants.

One potential problem with newbie agents though is that they haven’t seen many, if any inspection reports and therefore don’t have the experience or frame of reference to put an inspection report into proper context for their buyer. Surviving the inspection and Option Period is an important element of every transaction. For example, experienced agents know that most 1980’s houses will produce an ugly inspection report, in part due to code changes since the house was built but also because it is in fact a 20 or 30 year old house. When a newbie buyer agent tries to negotiate for their buyer the curing of every last item indicated on an inspection report, their inexperience shows.

Experienced agents warn our buyers before we write an offer on an older house what to expect from the inspection report, and that the buyer needs to be prepared to accept some imperfections in the older home, or look for a newer home. We also have seen enough homes and inspection reports to know when a buyer should go ahead and walk away from a home with numerous and/or chronic problems, and we don’t hesitate in making that recommendation to buyers when we think a home might be a lemon. Newbies can’t make that judgment call with the same level of certainly as experienced agents.

So is an experienced agent always better? No, oddly enough.

Looking back on all the boneheaded things we’ve encountered with other agents, the newbies by no means have the corner on incompetence or mistake making. An experienced, arrogant, burned out agent 20 years in the business can screw up a deal just as quickly as a newbie. In fact, they may do so even more often because they are more stubborn and ridged in holding to their time worn “way” of of handling the transaction.

The other thing to consider if working with a Newbie Agent is your personal experience in buying or selling homes. If you’ve been through the process numerous times, I’m less worried about you using an energetic, focused new agent who is well supported by an experience Broker. But if you’re a first time buyer, looking in a new city and working with a brand new agent who just moved to Austin 6 months ago herself, you need to find a veteran agent who knows the city and neighborhoods well enough to provide you with a broader overview and perspective on your choices and options.

Finally, if a Newbie Agent is still working a full time job and is only available to handle transaction related tasks after hours and on weekends, I have to say I would not use that agent under any circumstance, unless perhaps they were teamed with a full time partner who can back them up. There are too many last minute, deadline driven tasks during a transaction for you to be properly served by an agent who can’t return your call until after they get off work at their State job.

So, if I were personally moving to a new area and buying a home, I would look first for an experienced, accomplished agent knowledgeable about the areas in which I would be looking. I would want them to be able to answer questions about the history of growth in the area, the current direction of growth, which schools are most favored, average and median prices in different areas of the town, where the traffic bottlenecks are, and other nuances I may not know to ask about. This would be especially important to me if it was lake property, urban condos or some other niche segment that I was buying into, for which a higher level of advice and expertise from the agent is a must.

But I certainly would not automatically rule out working with an enthusiastic newbie who had the support and resources of an established Broker and other agents in the office who could fill any gaps in knowledge or experience. Even the very best agents had someone as their first or second client.

Finally, one of our most valuable software tools, Google Calender, is still technically in “beta”, and we could not live without it. Sometimes the beta version can actually be the best for you.

6 thoughts on “Is Your Austin Realtor a Beta Test or a Production Version?”

  1. So what’s a new agent supposed to do? You can gain experience without working a few deals, but no-one wants to work with you because you don’t have experience.

    Maybe we should have mandatory apprentice period of a year or so. Just about every other trade like plumbing, electricians, AC, inspectors, etc.. seems to have that, but real estate doesn’t. It would also weed out dumb part-time agents who are only in it to collect a commission for their friends.

  2. Hi Jim,

    You asked: > So what’s a new agent supposed to do?

    I think there is more than one “right” way to break into the real estate business, but when a Newbie asks me, I tell them to come work for Keller Williams. The reasons are as follows:

    1) Training, and lots of it.
    Six weeks out of the gate. Any new agent who goes through the basics is at least going to have a solid foundation to build on.

    2) Help, and lots of it.
    Even the most experienced agents run into strange situations for the first time. It’s nice having other agents, Corp Attorneys and Managers on staff who’ve “been there, done that” and can provide a quick answer to the question.

    3) Listings, and lots of them. The fastest way to get started for a newbie is to get actual face time with buyers or sellers. Since KW in Austin dominates the market, there are plenty of well staged, vacant listings at which a Newbie can hold open house and start having real, actual conversations with prospective buyers. There is no faster way to get up and running that open houses.

    4) Synergy, Energy – and lots of it.
    More nuanced, and less easy to measure, but one of the reasons Sylvia and I are at KW instead of on our own like we were for 11 years, is the “rubbing elbows” effect of being around and with other successful agents every day, hearing how they’re doing, hearing their take on the market, trading stories, etc. A Newbie can capitalize on that as easy as a veteran.

    Anyway, that’s how I see it. Starting with a Mom and Pop might work better for some though. We do have Newbies at our office (the largest real estate office in the WORLD by the way, with 750 agents at present) who feel lost in the shuffle and leave for a smaller company. I think they made a mistake in doing so, but the big busy office scene isn’t a perfect fit for every individual.


  3. Steve,
    Does it worry you a little bit that little Austin has the biggest real-estate office in the world? Sounds like the nonexistent Austin housing bubble is fully on in Austin.


  4. Steve:
    this is why I like coming to your blog – you are very open to presenting the whole story, not just what benefits you. As the article started, I was anticipating a speech from a “company man”. I am glad you pointed out that some people may fair better at a smaller Mom & Pop shop.
    Additionally, I would like to add that the definition of Successful should be measured in the eyes of the individual. I may have been extremely profitable as an IT reseller and made great money. But the stress and burden it put on our family would hardly qualify my tenure as Successful. Now that I am a self employed Stager, my pay checks are considerably smaller, but the hours are more flexible, the stress on our family is less, and every one is happier.
    My point is: Kudos to those who leave large shops to seek a smaller work enviroment – pursuing what will make your career Successful [to the individual] is a task many people never do.
    Lastly, Should it be considered a “mistake”, as you put it, to follow a new path in your career? I don’t think so – It’s just Different Stroke for Different Folks.

  5. > Does it worry you a little bit that little Austin has the biggest real-estate office in the world?

    No, why would it worry me? We have no real estate “bubble”.

    > this is why I like coming to your blog – you are very open to presenting the whole story

    Thanks, I appreciate your comment.

    The “mistake” I was referring to is more of a generic statement. If an agent can’t be happy and succeed at the KW SW Market Center in Austin, I’m not sure where the greener grass lies. It’s just my personal observation and opinion. Some agents blame the size of the office for them not doing well, when it’s really other things more related to the effort they put worth.


  6. Beta REALTOR vs cosmotology license requirements in Texas:

    In order to obtain a license in cosmetology or nail technology in the state of Texas, students must complete the requirements listed below. Please contact the Texas Cosmetology Commission for more information.

    COSMETOLOGY: 1500 hours
    ESTHETICS: 750 hours
    NAIL TECHNOLOGY: 600 hours
    HAIR BRAIDING: 35 hours
    HAIR WEAVING: 300 hours
    INSTRUCTOR: 750 hours

    Before applying for a real estate Salesperson License, an individual must first furnish the Commission satisfactory evidence of successfully completing the following education:

    Principles of Real Estate core real estate course [60 classroom hours]
    Law of Agency core real estate course (30 classroom hours)
    Law of Contracts core real estate course (30 classroom hours)
    An additional core real estate course (30 classroom hours)
    Another four semester (60 classroom) hours in core courses or in related courses acceptable to the Commission.

    Average price of a haircut – maybe $50.
    Average cost of a house in Austin in March, 2008 – $245,000.

    Now that is scary!

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