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78 Comments on NAR Reports only 60% of Buyers Use a Buyer's Agent
Donna,
It's amazing that buyers will plow in and be unrepresented. I believe that the stats may be a bit misleading. I don't believe that many buyers use the listing agent to sell them their home. It must be taking new homes sales into consideration where the salespeople don't have to be licensed; at least here in Texas.
The only way this is going to change is through legislation by state. In California it is legal to "double-end" a listing. Until dual agency is illegal, most buyers will think they are getting the better deal by going directly to the listing agent.
I've observed my buyer clients already had an understanding that it is in their best interest to work with an agent who represents them and so they chose me to be their agent. It falls on agents to educate the public on this point.
I agree the NAR Should educate Buyers about the need for representation of thier own. However, I think the large real estate firms might not like that, and they run the NAR.
The blog post just looks to shed some light on the 40% figure. While 29 percent of buyers did not have an explicit “buyer only” arrangement that was oral or written, they could have still used a buyer’s agent. The buyer’s agent could have been the listing agent to the home the buyer bought or, while the buyer did not have the arrangement, they might have purchased a home the buyer’s agent was not the listing agent to. Chart 4-6 only addresses whether the representation agreement was explicit or not. Chart 4-6 does not address if the buyer bought through the listing agent. In fact, as the chart notes, 11 percent simply did not know. Just wanted to mention that the 40% figure may in fact not be so high.
I believe the figure is close to right. I have sold 10 of my own listings this year and 6 I had both sides. also when I get calls on property you dont know how many times I try to get them to let me help them and they say we just call whos name is on front of the home. Of course you cant say to them well I can negotiated better then the listing agent because your the listing agent they are calling now.
I have been quite uncomfortable working both sides of transactions. I am always nervous I will say something to one side that I shouldn't disclose. Maybe overly protective of the relationships. I wont say I don't enjoy commissions from both sides of a transactions and in some situations it is so much easier to work both sides.
Another question? Do listing agents call potential buyers back more quickly than buyer's agents? It sure would appear that way in my most recent experience.
The advantage to using the listing agent is that they know the property! The downside to that is when the listing agents never go to a showing!
Interesting, yet consumers will do extraordinary things that are out of anyone's control. I'm not concerned about national statistics, just my area, so I focus on the statistics that affect my business plan.
That is a really scary statistic. What behooves me is the fact that it is free to use a buyer's agent to protect your interests! It can't get any better than that!
Hi Donna - As many times as we have written about the importance of buyer represention, I think so many buyers still don't understand it. It looks like our job of spreading the word is never done!
WOW! Locally that number is much smaller. I meet many people at my open houses that are not working with an agent, most of the time because they are not yet serious about buying. Those that are serious about buying are more than willing to give me their contact information so I can register them on my website to receive automated email notifications of new listings that come on the market. When a new listing comes up they are interested in we set a time for me to show them the house and the relationship continues to strengthen.
Good grief.....I just don't get it....???
Other than those who (wrongly) think there's no benefit to having an agent who is working solely on their behalf, and (in my opinion) foolishly decide to work with the listing agent.....I cannot figure out where those numbers are coming from....???
Bottom line - buyer agents MUST do a better job of explaining the process and ALL the reasons why the buyers should work with an agent who has their back.
Definitely a thought provoking post - thanks!
PS Do you miss Dallas???? Hope all is well in Austin :0)
Hi Donna, Not sure how the math works there but buyers are my biggest frustrations:
Why I Fired a Cash Buyer!
Amazing, I had not seen that statistic. Who is looking out for those buyers best interest? Can't tell me it is the sellers agent...
Can't imagine these statistics are correct. Definitely not what I've seen either recently or ever. I'm with you in that I've only had a couple listings in my career where the buyer didn't want to be represented. I can see how buyers are unrepresented with new construction, but really can't buy the stats when we're talking about the rest of the market
Those are interesting numbers. Double-end transactions are not a huge portion here. A lot of agents don't use the buyer-broker agreement or explain the relationship to their clients. I sit down and go over all of that with my clients and have a good ratio of closing them. We are responsible to educate our clients.
I just took 20 minutes and ran the market intelligence / stats on the Denver metro area, I dont know if we have done a better job of educating the public as an industry locally or if our buyers are just "smarter" than the rest of the USA, either way, that NAR stat isnt even in the right ballpark (for Denver).
Did NAR get their results by "survey" or did they get it by actual transactional statistics?
Here are Denver metro actual transactional statistics from 2007 to present. (2011 is only Jan1-Nov30)
Percentage of deals where a Buyer Broker/Buyer Agent was used.
I took the total sides (con and res) and divided by the total # of sides where the selling broker ID was different than the listing broker ID.
2007 = 88.653%
2008 = 90.75%
2009 = 93.598%
2010 = 94.23%
2011 = 95.475%
I think there is only one place where the 60% might hold true and that is on New Construction sales. Otherwise NAR isnt even CLOSE to the Denver market. We almost always (95.475%) have a buyer's broker or buyer's agent on every deal here.
I have to agree w/Jayson w/o running our local stats I would say that more times than not there is a buyer's agent involved. There are a fair number of times where the listing agent gets a double end deal and occasionally we see a non-member deal, meaning the buyer chose no representation. I think buyers sometimes feel as if they are smarter than an agent and can do this themselves. However, if the buyer were paying for their agent I think we would see that number drop, buyer's see the value in a buyer's agent because they are not paying for their representation.
I keep on wondering myself what's going on in their minds when they try to buy with listing agent or do not have any representation. This is very sad that NAR and local realtor organizations are not doing more to help general public understand the need of professional representation.
I feel bad for those buyers, because it's probably costing them money to not be represented exclusively, but it's not all that surprising. It all boils down to a lack of knowledge, and NAR should do more to educate the public.
I've been a realtor for 10 years, and it seems almost crazy to me NOW that a buyer would not use an agent to represent them. HOWEVER, when my wife and I first started looking for a home before I was in real estate, we didn't get a Realtor because we didn't want to "PAY" for one. So, we drove around neighborhoods ourselves and called listing agents or looked at flyers for more info. I had NO CLUE agents were paid by the seller, and as a 1st time buyer you wouldn't know, unless someone told you.
I have a free report, "How Realtors get paid" that I give to 1st time buyers. I don't know that it makes any difference since I've already made contact with them, but I give it out anyway. It needs to go out to the public.