BUYER AGENCY - First, let me say, I know that good buyer agents can help make the entire sales process easier, more efficient, and they definitely serve a vital role in our new homes industry. REALTORS® are our number one customer and we co-broke most of our real estate transactions with them. Agents representing the buyer can help builders sell more new homes, just as good new homes agents can help make the sale of a new home a smooth, pleasurable one for all too. We love working with our buyer agents!
Now, that I've got that out of the way, there are a few issues that new home agents are concerned with today. I'm not necessarily pointing fingers at anyone in particular, but it's as much about how the sales process has changed dramatically in the past few years. I'm going to try and tackle some of the issues out there from a new home agent's point of view, and it is long, sorry! (I was a resale agent first- we still list and sell resale homes within our communities, and from time to time we get an opportunity to represent a buyer. In most cases, we are new home agents representing the seller/builder).
I'm sure when the whole Buyer Agency thing happened in our industry, the concept was that real estate agents would be fully trained on how to best represent the interests of their client, the buyer, and help "protect" them in all real estate transactions. As a real estate agent BEFORE buyer agency, we all knew that "Buyer Beware" was out there, but many buyers just weren't that aware of things to look out for. Some listing agents didn't write things in contracts to properly protect them (home inspections, provide market research on the property, etc). I used to let buyers know their options and would do my best to be fair and honest in all dealings, but the original intent of buyer agency is good for all parties. We were all trying to do what's best for the seller, but as the selling agent we were also working hard to serve the buyer from a customer service point of view.
While selling real estate in 1985, we were all considered as Seller agents (for all of you new agents that don't remember). During the recession of 1990 and 1991, agents were working hard to help put deals together. We all worked towards the same goal, which I think may have helped the market bounce back quickly during a tough real estate period. There weren't buyer agents recommending how to negotiate the price lower and there weren't short sale specialists listing homes at ridiculously low prices. I'm not saying buyer agency is causing a delay in a real estate recovery, but it is sometimes tougher to move inventory in this real estate market today for several reasons. (I also realize the recession of the early 90's is very different from the six year housing depression we've been in).
After three years in the resale industry (1985-1988), I began working in new homes. Our company made working with our fellow REALTORS® a huge priority, and we still do today. We were able to work together in finding the right floor plan and right home for their customer. Many in the business today lack some of the basic fundamental selling skills that real estate agents of the 80's and 90's possessed. There's a different skill set in some cases, in my opinion. Today, they are much more adept at working with computers, website marketing, social networking, etc. One-on-one selling techniques are not practiced the way they were used to, and our goals were to uncover real wants and needs with customers, overcoming objections, and finding the right home that matched their needs. Today, when a customer objects, often times I see their agent react, "Well, let's just go onto the next listing that I've got to show you"...we used to try and analyze the concern and solve it together.
The NEW HOME SALES PROCESS- East West Communities builds Information Centers for REALTORS® to bring their customers/clients to. It is a chance to get a big picture overview of their new home options, discover the features and benefits of the community, and find out what the different featured builders can offer their prospective new homebuyers. It's a place to greet & meet prospective customers, and a place to discover all there is to know about the community, the area, the new homes, etc. It's also a place to uncover the real needs and wants of the homebuyer.
At the Sales Center or Sales Model, our new home community representatives (site agents) have a chance to present the differential advantages to the prospect, point out highlights of the new homes & neighborhood, and help discover exactly what the prospect is wanting in their next home. Many have never lived in a community where there were nature trails, waterfront parks, active programming of activities at a clubhouse, or monthly social functions- fun things to do in a planned community. They have never been exposed to some of the amenities before, and they may not appreciate those aspects of your neighborhood until it's properly demonstrated (plus there's an emotional aspect to walking out on the pier and imagining doing this when living there). Many agents have never found out what their buyer really wanted to accomplish with their next home because all they had asked was how many bedrooms and baths they wanted, and how many square feet did they want? Hardly ever do they ask, "what do you like about your current home?... What do you dislike? What would you like to change?... What would you like to accomplish with this move?" Big picture questions, uncovering their emotional needs and wants.
Back in the day, there was open dialogue with the site agent, the buyer, and selling agent. It was all about getting the buyer all the information they needed to help them decide whether that builder/community was right for them. Often times, we'd bring the builder in to meet with all parties and discuss the buyer's wants and needs, there would be a healthy exchange of information. This helped both parties come to an agreement and, before long, the buyer was ready to move forward with a contract to build their dream home. They felt comfortable with the decision.
Today is different. Many buyer agents do not allow you to speak to their client. they don't want to bring them to the Information Center, and they do not want you present anything when they show your new home. Buyers are trained not to talk to the new homes agents, etc. (This is where the buyer loses in many cases.) Whereas the buyer's agent is trying to protect their client, they are in some cases, hindering the sales process and eliminating an important part of selling a new home today. Sometimes, there's a wedge put between the Builder/site agent and the buyer.
Buying a home is a highly emotional purchase and this takes the emotion out of the sales process. Most of the time, the buyer's agent cannot possibly know all there is to know...sometimes our communities have eight different builders and they all offer different products. They do not have the lot information, what models are scheduled to start that week/month, and they do not know all of the particulars that may have a positive impact on the buying decision process. Sometimes it is an agent's personality (attempting to maintain control), or it's possibly fear that the site agent may make them look inferior (which is a reason we always try to make the outside agent look good in front of their client.) Our intent is just to help get all the information out there and to point out the facts/features that the Seller wants us to point out- present the product the way it needs to be presented. Somewhere along the line, we've lost sight of what needs to take place to be totally fair to a Seller. An agent that runs their own incomplete CMA and calls it an "indication of value"- this is detrimental to our industry. We're so focused on "protecting" the buyer, that it is extremely difficult to present all facts necessary to properly represent the seller.
RIGHT PRICE? or RIGHT HOME? Too many are focused on just the RIGHT price, and not on the RIGHT home or RIGHT neighborhood. I believe it's our duty to try help them achieve both. Why not focus in on the right home plan, the right lot with the right builder, and negotiate a fair price? I'm not saying buyer agents are purposely steering buyers to resales, not at all. Many don't fully understand or believe that a new home community agent, like our agents at Founders Pointe or The Riverfront, can add anything to their sales transaction. They believe the home listed in MLS is there, and you are not to enter the picture. In reality, there's much more to explain and inform the customer about sometimes- the special architectural guidelines or the different warranties, for example. Some try and run a competitive market analysis on the custom home community on there own. They use that "CMA" to base their extremely low offer on, when in fact, the CMA is inaccurate. No allowance for variances in quality, premium on lots, or differences in home type- porches, 3 car garages, etc. The selling agents to ask for help when trying to d a CMA in a community they're not the expert on. We try and head that objection off at the pass by showing homes that have sold recently and explaining why the new home their looking at is priced fairly.
There ARE many agents that we've established positive relationships with over the years that DO get it, and they do allow us to present the features and benefits. They do have happy homeowners who live in our community and they know that it is important to work together and that their buyer needs to be able to make a more informed decision about where they want to live. Maybe some resale agents have had negative experiences with other new homes site agents, I can understand how they may distrust some new home agents. Not all agents are like that however). We strive to help them achieve their dream home and do so in a respectful and polite manner. We want buyers to be able to get the whole picture. Why do we want to restrict information to a buyer, especially information that's pertinent to the potential real estate transaction?
Many buyers are confused and are sidetracked by the wealth of information on the internet. I realize that during the recession of the early 90's, the buyers weren't flooded with endless listings of homes listed everywhere. They used to go out and look at the property "in person", again allowing emotion to enter the sales process. Effective, well informed "site agents' can help sift through the all of the clutter and help make the picture clearer to the consumer. There can be a benefit to the buyer agent AND customer with a well trained, well informed "site agent".
SHORT SALES - Some real estate companies now make Short Sales and Foreclosures a major highlight on their home page. (Again, I realize there's a need for this in many cases. I also know that other real estate markets are different than ours- Southeastern Virginia.) Many real estate agents market themselves as short sale specialists now. You don't see as many "golf course/waterfront specialists" any more. "Bank owned" homes used to be marketed in with the other homes and only when you showed it did you realize it was owned by a bank, so the buyer's perceptions were not influenced prior to their arrival. Also, today, you see "SHORT SALE" is sometimes used as a code word for, "Get a deal, don't pay too much on the other homes".
We had several instances last year where customers finally found their way into our sales center without their agent, just to see what their new options were AND to compare to some of the homes they'd been showed by their REALTOR®. After a day of looking with our community sales agent, they purchased a brand new home and discovered that more quality was being included in our new homes than they thought. (they had no idea) Why didn't their agent present us as an option early on? Agents used to preview (again, back in the day), and buyer agents do have a duty to know what's available in their market area. (Some do come out to preivew, but most agents DO NOT).
Yes, I recognize there is a need for a short sale specialist- a need to handle those home sales efficiently. My question is; Is every short sale listed for sale today- is it really short sale situation? Have some "given up" on trying to advertise and market homes at market value? Is it the easy way out? I'm just asking the questions. Are some not wanting to wait out the time frame for their market value to return and they're listing their home as a short sale even though they can afford to make their monthly payment? A local real estate agent has been advertising on the radio, "Stop making interest payments one equity you don't have!". My question is, how will they ever get their equity back as long as real estate agents keep listing homes thousands below market value (and sometimes when it doesn't seem necessary) just to move it quickly, and because they can. (We are selling homes in these communities at market value and, often times, the homes listed as short sales are EXTREMELY low. Some agents are now "trained specialists" and they're helping to get the banks to release the owner from the loan. Again, I'm not saying that ALL are done this way. (This is needed in some cases) I'm just asking the question. I wonder if everyone is a short sale? Is it ethical for real estate agents to do this when it's not absolutely necessary? Who's out there working for the sellers any more? Sometimes I wonder if this buyer agency thing is working the way it was intended...
We have seen some excellent sales success in the past year, and we're optimistic about the real estate market in general. We see the market improving in our region. I hope that we'll see more agents in the future, working together to help buyers and sellers accomplish their goal. Thanks for reading.
For Information about East West Partners’ communities, visit www.eastwestcommunities.com. Discover the best in lifestyle communities at Founders Pointe, Eagle Harbor, Liberty Ridge, and The Riverfront at Harbour View. East West Realty Sales Centers are open 7 days a week on-site. Equal Housing Opportunity