- The Washington Times - Friday, September 26, 2008

The summer’s high gas prices have forced many Realtors to rethink the way they conduct business in an industry centered on driving.

As independent contractors, Realtors pay for their own gas and other expenses. While it wasn’t such a big deal a year or so ago, with gas once again hovering around $4 a gallon, many Realtors who depend on their cars for their business are frustrated.

“Realtors are out in the field all of the time,” says Lawrence Yun, chief economist at the National Association of Realtors. “When they’re not driving clients around, they’re looking at prospective homes.”

He says that even with the problems spawned by the mortgage meltdown, many Realtors say high gas prices are their top concern because they eat directly into their profit.

Industry professionals say agents who work in far-out suburbs may be feeling the pinch even more as they have to drive greater distances from listing to listing than agents who work close to or in the city.

Margeau Gilbert, a Realtor with Exit Right Realty in Laurel, says, “Not only have high gas prices made things more difficult, but the volatility of the prices is making the most even-tempered Realtor downright cranky.”

Ms. Gilbert, like many Realtors, has a sport utility vehicle that is now dubbed a “gas guzzler,” but it comes in handy when showing homes to families, hauling loads of paperwork or multiple yard signs and essentially serving as a mobile office.

“At one point, I was paying $75 just to fill up my gas tank,” Ms. Gilbert says. “When you consider that most full-time agents have to fill up their tanks two to three times a week, you can see the enormous economic effect this has on us.”

As a result, Realtors have had to adjust the way they do business, with many relying more on the Internet and requiring preapproval letters from serious buyers to weed out those who just want to hop in the car for a sightseeing tour of homes.

Experts say a pre-qualification letter also tells buyers what they can and can’t afford so that they’re not wasting their time and an agent’s time driving around looking at homes they aren’t financially qualified for.

“If they talk to a qualified lender beforehand, then you can focus much better on what they are looking for, and it is more likely that they are serious as they have taken that step of getting preapproved,” says Frank Snodgrass, a Realtor with S. Carney & Associates Inc. in the District.

He says, in general, good buyer’s agents have always tried to qualify buyers before starting to look at homes. Typically, he has new buyers meet him at his office for an initial interview to discuss the process and learn more about what they are looking for in a home.

Mr. Snodgrass adds that if a buyer is willing to take the time for that interview, it is another good sign they are serious about buying. He says taking both steps should help avoid wasting time, money and gas on people who don’t have any real intentions of buying a home.

Ms. Gilbert says if a client is interested in several different neighborhoods, with today’s high gas prices, she will ask them to preview the neighborhoods, then let her know which two or three they would like to see in more depth.

“I hate to do this, but I have no choice. Luckily, my clients have been very understanding,” she said, adding that one client even offered to fill her gas tank after spending an entire afternoon looking at properties in three counties. “I declined her very gracious offer, but was touched by her generosity.”

Realtors also have found themselves doing more referrals to outlying counties. Even though Ms. Gilbert is licensed in Maryland, Virginia and the District and never gave thought to distance before, she said that now she thinks twice before driving long distances.

“What’s a really long distance? Well, now, that depends on the price of gas that day. Really, it’s come to that,” Ms. Gilbert says.

Technology has played a growing role in real estate through the years, and those online photographs and virtual tours can help Realtors and their clients save gas.

Agents say that there was a time when most of their calls were generated from signs seen while the prospective buyer drove around but that now Internet inquiries often are the main source of calls.

“By and large, people don’t drive around looking for ‘for sale’ signs or open houses anymore,” says Bonnie Casper, a Realtor with Long and Foster Real Estate Inc.’s Bethesda office and board member of the Greater Capital Area Association of Realtors.

Mr. Yun says there’s definitely a trend in greater Internet viewing before contacting a Realtor.

“Some Realtors say that the Internet has helped consumers become much more aware and not waste time and gas driving around,” he says.

He also says the Internet allows them to truly focus on the properties they are most interested in seeing.

Ms. Casper says that like today’s buyers, Realtors are being more strategic when it comes to driving.

“They are planning their routes very carefully and are not doubling back,” she says, adding that using tools such as MapQuest and navigation systems helps to save the miles.

Ms. Casper is also chairwoman of the Green Realtor Task Force. In addition to using technology to show homes, she says she has noticed some Realtors trading in their larger cars for smaller, more fuel-efficient vehicles.

“Realtors in the city are also sometimes using public transportation to show condominiums to clients,” she says, adding that it’s not unusual for Realtors to meet clients on foot in the city.

Mr. Snodgrass believes the hike in gas prices has had a much more profound effect on consumers.

“While cheap fuel may have helped spur suburban growth, the recent spike in fuel prices has had the opposite effect,” he says.

Homes convenient to jobs and mass transportation have seen their value hold steady or even increase, compared to homes farther away, Mr. Snodgrass says.

“You will find that many are more willing to sacrifice the huge house and yard in order to be closer to their jobs or some modes of public transportation.”

“Less buyers are actually interested in areas that require longer commutes,” Mr. Yun says. “They want to be closer to their job centers.”

Ms. Casper agrees and says that while the suburbs aren’t facing a major population decline, people who move to the suburbs are looking to live in areas near mass transit routes to make their commute easier and save gas. She says many companies realize this as more are moving their headquarters to the suburbs.

“Industry and government jobs are moving outside of Washington, and there are a lot of consulting firms along the Dulles Toll Road,” she says.

Ms. Casper says she believes high gas prices will be a long-term issue and that the bottom line - high gas prices or not - is service.

“We are in a service industry,” she says, “so while we’re looking at ways to adjust, we’re also looking at how to service our clients in a way that benefits them.”

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