Many neighborhoods have an agent or two who are “neighborhood experts”. Your neighborhood may have one.

The “neighborhood expert” is the agent you see on the bus bench near your home. He’s the one that puts a small American flag in your yard on the Fourth of July. She mails you regular updates on neighborhood home sale activity. He does community service projects or hosts neighborhood parties.

Is that agent the logical choice when it comes time to sell your home? 

The neighborhood expert may be a fine choice to represent you when selling but the decision should not be based solely or even primarily on neighborhood expertise.

A simple thought experiment shows that neighborhood expertise alone is not enough.

Imagine a person who serves on the home-owner association board in your area. Or, think of a nearby neighbor that hangs out on Nextdoor. These individuals know a lot about the neighborhood and they might be smart – an accountant, a pharmacist or even a brain surgeon or rocket scientist — but their neighborhood knowledge alone does not give them magic power to help you with a home sale.

While unlicensed people clearly don’t have home selling expertise, certainly all licensed agents have the requisite skills, don’t they? 

Actually … no. Not really.

It is vitally important to realize that you are hiring a skill set when you team up with an agent to get your house sold. Exceptional agents have highly honed expertise in pricing, staging/pre-sale preparation, marketing, negotiating and contract preparation to name just a few. 

Not all agents do these fundamentals equally well. The barrier-to-entry into real estate sales is low and doesn’t ensure the kind of competence that an engineering or law degree confers. Lots of agents do business on the strength of personality alone without every really becoming very skilled at the fundamentals. 

All agents are not created equal just like not all piano players are equally talented and not many baseball pitchers make it to the major leagues. When it’s time to sell your home, you want a virtuoso … or an ace.

The neighborhood expert who is also a wizard in real estate fundamentals can, of course, be using his knowledge of the community to help get you a screaming good deal when selling your house. If the neighborhood expert is weak on the fundamentals however, he’s not a good choice. You’ll be better off with a skilled agent from across town.

A top-notch agent from out of your area will have a game plan for gaining essential neighborhood knowledge as part of his overall plan for serving you at a high level … just like a concert pianist that plays classical music can quickly adapt to play jazz music at your wedding reception or a great pitcher can move from LA to Boston and still pitch a no-hitter.

In other words, the essential question to ask and answer when selling a home is not “Has this agent sold a lot of homes in my area?” but “Is this agent really skilled at her job?” 

Go with the most skilled agent and it’s highly likely you’ll be thrilled with the outcome.

Three additional factors to consider:

  • Pricing: 
    • The neighborhood expert has probably seen most of the houses sold in the subdivision and this first-hand knowledge can help in pricing your home. 
    • On the other hand, continual work in the neighborhood can cause the agent to have preconceived ideas on pricing. Someone from outside the area approaches home pricing without any bias and may see beyond entrenched stereotypes.
  • Negotiating the Best Deal: 
    • When the neighborhood specialist lives in the community he serves, he has a vested interest in keeping property values high and so may fight harder for the seller in price negotiations.
    • On the other hand, have you ever stopped to consider that the future client of the neighborhood expert is your buyer? There can be a temptation to bend over backwards to create a good experience for the buyer so as not to foreclose the possibility of gaining the buyer’s future business. This can compromise an agent’s willingness to negotiate hard for the seller … and perhaps this is an even greater temptation when the agent does not live in the community served.
  • Off-Market Sales: 
    • Sellers might think that the neighborhood expert has inside knowledge of a pool of potential buyers wanting to move into the community. Perhaps the community specialist can put together a deal without the seller’s property ever officially hitting the market. Surprisingly perhaps, this is a very poor reason for using the neighborhood expert. There are circumstances where an off-market sale makes sense for a given seller in certain cases, but it is an undesirable strategy in general. An off-market sale is often at a lower price than would be achieved by being on the open market, which is why such transactions require a high level of informed consent per real estate commission rules and the Realtor code of ethics.