Have you seen the movie musical The King and I? There’s a charming scene where the King, as played by Yul Brynner, defends his kingly tradition of having many wives by singing a short and sweet song to Anna, as played by Deborah Kerr.
To fly from blossom to blossom A honey bee must be free, But blossom must not ever fly From bee to bee to bee.
Lyrics from The King and I
This is how certain homebuyers search for homes, as if they’re blossoms flying from bee to bee to bee. Instead of contacting one real estate agent, they contact the listing agent of every house they wish to tour, meet with the agents individually, and if they happen to like any one agent’s listing, make an offer.
At best, these independent-minded buyers have turned home buying into an unnecessarily difficult process. At worst, they might ultimately complicate the purchase in ways they never anticipated and unnecessarly do themselves a disservice.
This is how independent buyers work ~~
Either they know someone in the industry so they can tap into the local MLS, or they rely on Realtor®.com and similar websites to locate houses of interest.
They call the listing agents of each house and arrange multiple appointments.
They meet with each agent individually, either at their offices or at each house.
When they find the perfect house, they will use the listing agent to finalize the purchase.
In Florida unlike many other states, it’s perfectly legitimate for the listing agent to also bring the buyer by acting as a transaction broker rather than a dual agent. Still, I perceive many problems with buyers going this independent route.
Unnecessary work for buyers - By contacting agent after agent after agent to arrange separate showing appointments, independent buyers are putting in a whole lot of effort that a single agent, whom they like and trust, would ordinarily do on their behalf.
Extra time and hassle for buyers - If the agent is diligent, he or she will ask independent buyers come into the office, which expands the amount of time needed to see the property but is a necessary step for the listing agent, who wants to make certain the buyers are serious.
Wasted effort for agent - Whether or not the buyers come into the office or meet the agent at the house, the agent will try to establish a some sort of relationship, even if it will last for all of one showing appointment. The agent will necessarily attempt to financially qualify the buyers, offer to e-mail free listings directly from the MLS, and give out information, pamphlets, and a bunch of smiles. Trying to develop rapport or trust with buyers on the part of the agent doesn’t always work since the buyers are only interested in access.
Time doubled or tripled for each showing - In each case, independent buyers must explain their preference for working alone and briefly outline their needs while explaining repeatedly why they choose to search for a home on their own and not work with any one agent.
Distrust on both sides - Even while the agent is trying to diligently establish a working relationship, however fleeting, independent buyers usually stand their ground.
Good business relationship? NOT - It soon becomes clear to the agent and the buyers that the situation cannot foster a strong business relationship since it initially begins with distrust. In the end, aren’t independent buyers really saying they don’t trust an agent to represent their best interests?
Missing out on agent’s strong suit - A good agent can intuit what their buyers are looking for, even when the buyers don’t verbally express their underlying desires. Buyers, for instance, might say, "4 bedrooms, 3 baths," but they’re also looking for privacy, openness, accessibility, calling distance between family members, and safety. Sometimes, just by putting together comments and body language, a perceptive agent can read their buyers. However, this can’t happen with one brief meeting, and the buyers will never know what they’ve missed out on.
Luck of the draw - When the independent buyer finds the house they wish to purchase, it’s very possible they might not gel with the listing agent and won’t want to work him or her. It’s only human nature for buyers and agents not to establish affinity or a place of trust. Establishing that rapport ought to happen before buyers are ready to make the biggest financial transaction they have ever made. But now they’ve backed themselves into a corner, and they could very well be stuck with an agent they don’t feel right about. Of course, they could dump the listing agent and go back to one of the other agents they met previously, in which case the listing agent won’t be particularly pleased, and the new selling agent will be placed in an awkward position.
In the final analysis, independent homebuyers who practice real estate without a license aren’t looking out for the best interests of their 'clients' and ought to resign in favor of someone who can.
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LOOKING FORWARD TO SELLING YOUR HOME!
OVIEDO · WINTER SPRINGS · LONGWOOD · LAKE MARY
MAITLAND · WINTER PARK
EAST ORLANDO
Stoneybrook · Eastwood · Avalon Park · Waterford· Cypress Springs
48 Comments on Homebuyers Practicing Real Estate Without a License
MAY
20
2009
You bring up a great point. An agent in my office just showed a lawyer couple a home and they were "representing themselves". They actually were out of the option period on another home where they had "represented themselves" and decided they wanted to buy the house the agent from my office showed them. These two attorneys failed to include anything that might allow them to terminate the contract legally, and since it was mostly cash, the house did not even have to appraise for sales price. They outsmarted themselves and did not save one dime in the process. Good post!
Judy, you are absolutely right! Buyers would be better served to spend that "extra" energy interviewing agents until they find one they can work with comfortably. Ask all the questions you need to establish that the agent is "on your side" and then follow the agents lead! We don't get paid until you buy a home and we don't get referrals from unhappy buyers!
Good morning Judy, this is good information but unfortunately people will do what they want. Lots of them aren't interested in hearing our side of the story. They often don't care enough to see the value of working with one good agent.....
I agree many buyers make the home buying process more difficult than the need too. Find some one that understand your needs. Best done by having a sitdown with an agent. No need to go to mutiple agents since we all have access to the same MLS listing. Now of course there are sometimes in house listings that are not on the MLS; solution, request agent to call induvidual offices to seek out these listings.
Judy excellent post. These points should be 'out there' to educate buyers to the folly of their ways. i've run across a couple like this but I alwasy tell them it's in their best interest to find an agent they want to work with and stick with that one. If it's me fine, it not ....seriousy... find somebody who will work in your best interests.
Stats from last year show that a home buyer will go with the agent who contacts them first (70%) and the expected turn around time has decreased from a few hours to 15 minutes! My old full time employer would lose so many leads because they would wait DAYS to make contact then put the source of the lead down because the client didn't want to work with them.
Dana - Buyers don't realize that shopping for a house isn't the same as shopping for a car. Even we professionals can't keep up with the legal ins and outs that crop up on a constant basis. And buyers can't possibly school themselves on everything that's happening in the industry or how to protect themselves in a contract. That's what the experts are for!
Sarah - Shopping for an agent rather than shopping for a house IS the best use of the buyers' time.
Patricia - Oh yes, once anyone gets something in their minds, it's almost impossible to convince them otherwise. I also don't think most consumers don't understand what it entails to be an agent. It isn't just driving around and putting together a bunch of forms.
Lenn - Here in Orlando, most agents are transaction brokers, which means we ride both sides of the fence. Yes, there are a few ... VERY FEW ... buyer brokers, and you will almost never find them at a national company or large office. Even so, representing the buyer as a transaction broker still requires many special skills that most agents have yet to master and may never.
Our local board also has a vigorous TV campaign on the air right now. It's general rather than specific about the value of Realtors(R) and pushes the positive side of selling and buying while ignoring the turmoil happening in the Orlando market. If we could see a television campaign that actually addresses the real and current needs of homeowners now, including home values, market trends, lost equity, foreclosure and short sales problems--in fact, everything ActiveRainers write about here--think of how it could change the perception of our profession. Being able to reach out one by one to the public at large is what's so great, and in a way, so limited, about AR. But we do the best we can to educate and inform, and hopefully with time the message will get out.
I see I trend with listing agents and especially REO agents trying to keep control of the process, basically double ending as much as possible. I have heard agents state on National Talk shows that buyers should deal directly with the REO agents. This is a bad move for consumers.
Milton - It's just a waste of time to meet with 20 different agents and have to explain yourself every single time. It's SO much better to establish a strong relationship with one. As a homebuyer myself (before I became an agent), there were times I'd go through several agents before I found the one I felt comfortable with. Twice, though, I found the perfect agent first time out.
Anna - Absolutely. It doesn't have to be me they pick, so long as they pick one. Otherwise, it feels like a lottery.
Billie - Ah, response time and the power of having a Blackberry. I don't have one yet, but I worry about the lead that comes in over e-mail and I won't be in front of my computer to field it immediately. When I'm able to give an immediate call back, my quick response time usually gets positive feedback from the other end. It definitely DOES make a good impression. And just think, it's so much easier these days to find a compatible agent. We have profiles all over the place, and often one comment we make or fact about ourselves will particularly strike a consumer and compel them to call or write. So use those profiles!
Kathy - Thanks for your comment. It's so much appreciated.
Fantastic points...some folks just like to "go it alone" but most of the time the lack of commitment is a sign of some other issue. Maybe they've been burned before by signing a buyers agency agreement. Most of the time I think folks just think they're "shopping around for the best deal" by contacting every listing agent themselves. It's sad, because the buyers lack of committment often translates to a weakened committment from an agent (they're a customer) instead of "all-in" agency focus from the agent (now they're a client). Buyers also don't realize the "agency" pitfalls by not working with buyer representation. Agency law is a slippery slope for agents as well.
You've hit on a problem topic that I have long believed NAR has failed to address in advertising. Millions of dollars are spent telling people to look for the "R" on an agent's lapel without really explaining why they need an agent to begin with and HOW THEY WOULD BENEFIT BY working with ONE AGENT.
The general buying public still has no clue how we work and/or how we get paid. They do not realize that they are wasting our time AND THEIR OWN TIME by flitting around without a focused plan and purpose.
As a fellow Florida agent, I fully understand and empathize with you.
The problem is more with the Realtors and NAR then with the buyers. The MLS has tried to keep all their data a "big secret" so that only Realtors can access it. In the meantime sites like Zillow, Yahoo, Google, Trulia, Craigslist, etc. have stepped up to the plate and provided the data for free and cut the buyer agent and to some extent the listing agent right out of the equation.
We as Realtors all need to evolve and fully grasp just how much the market has changed in the last few years. Unless we bring value to the transaction (which some good Realtors do and most marginal Realtors do not), the internet and its data is our worst enemy. The current commission model of paying x% or the house price should be looked at altogether because I don't think it can ultimately outlast the tidal wave of internet sites looking to compete against it for a much cheaper price.
Excellent post I'm going to re-blog! I agree that compaines and NAR don't do enough to help the public understand what we do. It's all about pretty pictues of houses - people don't think about representation and the process. We need to change the language of our business.
My experience with buyers who contact me is that they either get it or they don't - there will always be the ones who "just want to see the house"; and they will always find an agent to show it to them!
I'm all for choices, but every other industry has some standard practices - who else provides service or a without a written contract and a deposit?
In Massachusetts, an agent doesn't even have to have a written agreement to represent a buyer - just a disclosure for explaining agency options. Most of us know how dangerous that is, but as long as the consumer can get agent to "just show them the house", things won't change. And, then there are the websites where people can make an offer on-line and have an agent who they have never met and who has never seen the property (maybe not even the town) "represent" them...how crazy is that?
Gene - The foreclosure crisis has made cannibals of many. Greed got us into this crisis. And it looks as though greed will get us out???
The other day on Oprah, there was a story about a woman in foreclosure who only owed $2000 on her home, had already made up $12,000, but was being foreclosed anyway. She owed $30,000 on a home that she had lived in for more than a decade. A passer-by, seeing the owner on the courthouse steps crying her heart out, asked her what was the matter. After the homeowner explained her situation, the passer-by ... ahem ... Good Samaratin ... put in a bid, won the house, and GAVE IT BACK TO THE OWNER. Now they're good friends. Makes you wonder how $2,000 can get you kicked out of your house.
Marcus - What can I say--yet another case of Realtors(R) making other Realtors(R) look bad.
Tim - In my office, we are prohibited from being a Single Agent because it would put us in a dual agency position vis-a-vis the many listings in our 6 offices. This doesn't, however, prevent us from having a Buyer's Representation Agreement, though most of us work without one plus it isn't encouraged. Buyers don't know how lucky they are to get the services of an agent without (hardly ever) paying for the privilege.
Teresa - The beleaguered real estate agent. We can't get no respect, it seems.
Alice & Jim - Thanks for your support.
Tim & Susan - <They do not realize that they are wasting our time AND THEIR OWN TIME by flitting around without a focused plan and purpose.> Isn't that the truth!
Rob - Even with the proliferation of so much information on the Internet, Realtors(R) are still the best way of connecting buyers with sellers, and I don't think that will ever change. We're also the best source for what's happening in our own markets, down here at street level, and that too will never change. I also don't think that the discount (and often remote) agent can service the buyer or the seller as well as those of us who offer full service. But maybe I'm just prejudiced. VBG
Marilyn - THANKS FOR RE-BLOGGING! So many points you've made.
Yep, we work for free until the sale happens. Even when we have a listing agreement, we still work for free.
As to disclosure, the Florida Transaction Broker model has been around for so many years, we're no longer required to present a form listing the duties we're required to fulfill. It only needs to appear as a line item on disclosure forms that we're adhering to the specific law but not what that law means to the customer.
The online buy-sell model is good mostly for investors. For homeowners who want to live in the house, it's not always the best way to go. OTOH, I've heard of successful purchases by out-of-town buyers, but those require a really good hands-on agent who can feed them as much information as possible via photos, write-ups, and information.
Nice points. But my real question is: Did Anna buy into the song?? (I forgot about the movie, so I need to have my memory refreshed . . . I remember, I could have danced all night).
I agree with this, what I think buyers do is go from listing agent to listing agent and when they find a agent they like to work with they use them as a buying agent. They feel if they sign up with a buyers agent first then they are stuck with them, even if they aren't compatible
VBG Carla - No, Anna didn't. I'm not sure if this scene came next, but at one point, the king was interested in the way Europeans dance -- one woman and one man. Anna recounts what it was like as a young girl at her first ball and meeting a dance partner for the first time (her husband?). Pretty sure this led up to "Shall We Dance". She teaches the king to dance the polka, but then he realizes something is missing -- how the man puts his arm around the woman's waist. Then the magic. How romantic!
Judy, sometimes prospective buyers will "step over the dollars to pick up the nickels." That is not the easiest way to find a house! No matter how big the internet gets, it still all boils down to personal one-on-one relationships!
This really makes me mad too. Some buyer (people in general) have no respect for others time. I always ask (now I do) if they have a Realtor or if they are seeing other homes. Usually they will come clean and admit to seeing other homes later with other brokers. If I suspect they are not truthful I'll tell them to call the floor agent or ask them to meet me at the office for signatures on the agency agreement.
Hi Judy -- I have a very indepth conversation on fiduciary responsibilities, agency, dual agency, etc., and by the time I am done, most buyers realize they need a buyer's agent.
This is an excellent post. I'd say more but Lenn Harley said all the things I'm thinking. She's good at that. So good in fact, that sometimes I don't even bother commenting on hard core Real Estate posts :)
Judy, great post. Lenn is right when she says the failure is from the NAR down. I have written to the NAR asking them to mount a national campaign explaining buyer's agency to the public. No, I have not received a reply.
Double ending the transaction is good for the listing agent but does nothing for the consumer. Buyers need to understand that for their own good. Buyers who think that they know everything and choose not to be represented are the ones who tell stories for years to come of how they were cheated by a realtor. Then there are the buyers who have no idea what they missed out on. This is a problem that could be addressed by the NAR. Educate the public.
Judy, an excellent post. I've been running into a lot of buyers like this lately. I've wanted to tell them that they are going about the process the wrong way, but I didn't know how to express it as clearly and concisely as you have. Thanks.
TLW - Yup, Lenn knows how to get to the heart of it.
Maria - With all the information on the Internet and accessibility to listings, consumers may think buying a home is easy. They forget, though, that they're signing a contract, which comes with legal ramifications and obligations. It's also an investment that requires a substantial amount of decisionmaking, care, and money to bring to fruition. And it requires commitment for years to come. None of these things is easy.
You are so right on this! Great post! I think that there has been a failure in the industry to properly inform the consumer of the meaning and importance of representation. They think that the listing agent is their advocate and working for them and they never bother to even ask. If I had a dollar for everytime a buyer said that the last time they bought from the listing agent and felt like they got screwed, I wouldn't have to sell real estate to survive! :o)))
So many buyer think that if they use the listing agent, they are saving money by not using a buyers agent. They just don't get it.. The listing agent is still going to get paid... DOUBLE
Judy, you bring up some good points.
The real estate purchase process is esoteric to those who are not involved in it everyday.
I know that when I first began looking at homes -- that was when dinosaurs were just beginning to roam the Earth -- I thought the process involved me contacting the listing agent.
There wasn't anyone who explained the process to me, at that time.
"At best, these independent-minded buyers have turned home buying into an unnecessarily difficult process."
You are so right, I run into folks every week who have "mastered" the home buying process by learning it on some TV show or worse...The Internet! It gets so deep sometimes that it takes wings to stay above it!
Hi Judy, How ironic ? I'm working ( trying ! ) with one of your independent buyers now and it just seems like there is less a feeling of working togwether toward a common goal. She explained that they are doing it because the listing agent will know more than any other agent ! I explained that the listing agent also has some level of loyalty to the seller - oh well !
Wow, Looks like we agents all have the same fun with unpredictable home buyers. I think that it is very true that you can find out in the first few second of an introduction if you are going to click. If the potential buyer is responsive and polite about what I have to say about the property then I think that I might have a client. I always come right out and ask them if they have a realtor or if they are working with several realtors. You might as well cut throught the chase. If you match in personalities and have the business quality they are looking for -BINGO. I did an open house on Sunday and only had 2 couples through the $825.000.00 home which was on a Bay and the view was stunning. I knew by the way they acted that it was only an outing and they were not intersted. No responses!! I did get an email address for one of them and proceeded to follow through with it. Their response was oh no we are not ready to buy and are not ready for a realtor. I thanked them for their honesty and for previewing the house. On to the next open house and maybe I will get lucky. Hopeful in Bellingham, Washington
Exit Hill Country - As much as we try to be unbiased, our built-in loyalty with the homeowners as their listing agents is just going to win out.
Roland - Good point. Our services to buyers are free. Let me repeat that. Our services to buyers are free. There's no discount on free.
Andrew - There still isn't anyone to explain the process ... except us ... one customer at a time!
Russell - The Internet! It gets so deep sometimes that it takes wings to stay above it! I have to remember this!
Melissa - Double period!
Patricia - "Experience isn't expensive....it's priceless!" It's like the campaign NAR had a while ago. You wouldn't operate on yourself to remove a gall bladder. Then why would you go it alone to buy a house?
Bill - I explained that the listing agent also has some level of loyalty to the seller. So well put!
Jackie - So many open house attendees are just looky-loos. Then again, you never know. Sometimes it's a way for homebuyers to get their feet wet without committing. Before I became an agent, I did that myself. It took quite a lot of open houses before I found the agent that felt right. She eventually sold my condo and helped me purchase my first single-family home. Later, I attended her wedding!
Some buyer still do this and they think they are smart. If they have it narrowed down to a couple homes some how then maybe...but with all the options its way better to pick one agent to help you.
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You bring up a great point. An agent in my office just showed a lawyer couple a home and they were "representing themselves". They actually were out of the option period on another home where they had "represented themselves" and decided they wanted to buy the house the agent from my office showed them. These two attorneys failed to include anything that might allow them to terminate the contract legally, and since it was mostly cash, the house did not even have to appraise for sales price. They outsmarted themselves and did not save one dime in the process. Good post!