When selecting a real estate agent to help you buy or sell a home, is regional the new local? Throughout the U.S., strong competition and increased availability of real estate information is driving residential agents to widen their geographical market focus from purely local to regional. Does this shift reduce or improve service to the consumer?
Local agents have long dominated residential sales activity by promoting their expertise within a specific community. They kept up to speed on local issues such as zoning and development. They typically lived in the community where they worked and were available within moments, schedule permitting, to meet with a client or show a property. They networked with other local agents and knew ahead of time when desirable properties were coming on the market. They shared information about their pocket listings (properties not advertised on the multiple listing service) with other local agents. Do local agents still exist and provide these advantages to their clients? Of course they do. In many rural and suburban areas, not much has changed and clients continue to benefit from local agent expertise.
But the world is changing, as it always does. Popularity of cable television shows featuring home renovations and flips have rekindled interest in residential real estate, drawing in a growing number of investors and newly-minted agents. Established agents are experiencing increased competition as new agents flock to markets where property values (and commissions) are highest. Competition is especially brutal in communities where inventory of homes for sale is limited. Agents facing these conditions survive by improving their marketing programs, expanding their geographical service area, or gaining competence with property types other than residential. For example, after the 2007 housing market crash many agents began selling land and commercial properties (with mixed success).
Consumer demand remains the rudder that steers the ship of real estate services, and consumers are more often seeking agents with broader knowledge of housing markets within a given region. Here in the San Francisco Bay Area, agents who formerly specialized in only certain towns and neighborhoods have expanded their market knowledge and service area to include almost all of Silicon Valley (generally considered to lie within Santa Clara County and southern San Mateo County, though some argue that San Francisco, with its large technology job base, is also part of Silicon Valley). But the expansion of service areas doesn’t stop there. As rising real estate values on the Peninsula have driven companies and home buyers to cross San Francisco Bay in search of lower cost office leases and housing, Silicon Valley agents have successfully helped their clients make the move to the East Bay (Alameda and Contra Costa Counties).
In most cases, those Silicon Valley agents helped their buyers find homes using the same sources of information available to agents based in the East Bay. Currently, every MLS (multiple listing service) provider in the twelve county Bay Area offers its members access to listings provided by systems serving adjacent areas. Is all this MLS information the same as local knowledge? Certainly not, but it can get the job done.
Regionally-capable agents are not relying purely on MLS data to serve their clients. Other tactics are also being employed, such as forming teams consisting of members who specialize in various communities and partnering with local agents when conducting a home search or sale in an unfamiliar area.
Local agents still hold an edge when local knowledge is critical to a specific transaction. But those agents can ensure their longevity and profitability by also offering clients the ability to expand their home search area and have more neighborhoods to choose from. As consumers increase their desire for this capability, regional is the new local will become a more common standard of service.
About Real Living with Broker John™
Each week Real Living with Broker John™ provides innovative tips and information regarding all aspects of owning, buying and selling real estate. John Souerbry is Broker/Owner of Cordon Real Estate, a full service brokerage in California’s San Francisco Bay Area (CA BRE 01370983). Contact John with questions or comments regarding Real Living or real estate in Wine Country, East Bay and Silicon Valley.
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