In a bonkers housing market, some Realtors reaching beyond home turf
Because of a tight housing market, agents are willing to drive hours to the Alexandria area to make a sale, but the Greater Alexandria Area Association of Realtors has advice for buyers and sellers.
With the current state of the real estate market being described as highly active, extremely competitive, hard to sustain and even a little bonkers, Realtors are reaching far and wide to try and sell property. Even if it means selling property in an area they are not familiar with.
“Due to the lack of inventory, agents who don’t typically work in our particular communities or neighborhoods are expanding their area of travel to other regions, including ours,” said Joanna Hvezda with Real Estate by Jo and Co. “This causes a problem because it is impossible for somebody from out of the area to know our neighborhood values, our area lakes and our communities.”
Craig Mische with Alexandria Brokers Realty said like many other areas in Minnesota, it is a great time to be a seller. He said the local market is a robust seller’s market and the lakefront market right now is especially robust.
“With housing inventory low throughout the state, it is easy to understand why non-local Realtors are willing to make a four to five hour or more roundtrip drive to Alexandria to seek income by representing a buyer of a lake home for sale,” said Mische.
Hvezda said there's also a problem with sellers picking an agent from a different area to sell their home because again, that agent also doesn’t know neighborhood values, local market information, the area or the land.
She also said that the belief a seller would have better exposure using an agent from out of the area to help drive traffic their way is completely false because all of their syndication sites give listings national exposure.
“It’s actually advantageous for a seller to use a local Realtor when buying in a particular area,” said Hvezda. “The reason for this is because the right local agent will know off-market sales as well and will know current market conditions.”
A growing concern
Mische explained that in 2019, the Greater Alexandria Area Association of Realtors joined the Regional Multiple Listing Service in Minnesota, which has more than 20,700 members. The result, he said, is that previous challenges for Realtors to show homes listed for sale with GAAAR members were removed. It was common prior to 2019 for Realtors from Minneapolis to make the drive to Alexandria, but there were some hoops to jump through.
“With ease of access and possibly less work in their own market because of tight inventory and high competition, the number of Realtors coming to Alexandria seeking a commission have increased,” said Mische.
Hvezda agreed and said it is a growing concern. Some of it, she said, is because of inventory being so tight, which is resulting in buyer agents who are willing to drive farther to make a sale.
“The other factor is possibly because our local board became members of the Twin Cities MLS,” she said.
The newspaper reached out to GAAAR and the executive committee issued a general statement:
“When looking to buy or sell a property, look to a Realtor that you trust who knows and understands the local market area. All Realtors adhere to a strict Code of Ethics to protect and promote the best interest of their clients by working inside their areas of experience and competence. While looking at our April inventory statistics statewide, the available inventory was down 51.7%, while sales were up 10.9% compared to April 2020. These data points coupled with growth in the second home market may be a factor in Realtors travelling outside their home market area to serve their client’s needs. History shows that agents have traveled outside their market area for years. The common goal of all Realtors is to advocate for our clients.”
Regardless of why it is happening, there are some frustrations for local Realtors. Hvezda said what she is most concerned about is misrepresented buyers overpaying for homes that have historically been hard to sell due to condition, location and/or type of waterfront.
Mische said for him, one of the most frustrating aspects of the current real estate business is representing a buyer that submits an offer that should make a seller jump for joy and then losing to an offer that makes a seller do backflips and handstands.
Seek someone local
Both Mische and Hvezda shared some advice for people who are looking to buy property within Douglas County, which is to use a Realtor who is knowledgeable and experienced. Hvezda said to choose one who has experience in multiple offer citations as she said it is a “game changer.”
Mische said to choose someone who has experience in the local market.
For those who are looking to purchase property in areas outside of their own community, Hvezda shared some advice: “If you have a local Realtor who you work with and trust, ask that person to find or send you a referral to an agent who works in the market you want to buy a home in who they know and trust.”
Mische said it is best to work with a local Realtor.
“Per the Realtor Code of Ethics, there is a duty to be familiar with the area where the subject property is located and be knowledgeable about the type of property being valued,” he said. “I am not suggesting that Realtors not locally based aren’t knowledgeable, but without experience in a real estate market when it is on fire and when sellers outnumber buyers, it is a challenge to be knowledgeable.”
For Mische, he said if someone requests his help with real estate outside a 20-mile radius of Alexandria, he will advise them that it would be to their benefit to seek the help of a local professional.