Buyer’s agents won’t be around much longer.
That’s what Kerry Grinkmeyer, a retired financial advisor who now works as a luxury listing agent, predicted on a recent Real Estate Rockstars podcast. According to Grinkmeyer, buyer’s agents will become obsolete in the United States within the next five years.
In the interview below, Grinkmeyer explains why buyer’s agents won’t last as the industry evolves and makes several other predictions that, if proven correct, will affect all agents.
Read on for the three signs Grinkmeyer sighted as indications that the industry and consumers won’t be needing buyer’s agents much longer. For more details and to hear Grinkmeyer’s other real estate predictions, listen to the complete podcast interview.
SELF-GUIDED SHOWINGS COULD BE BIG
In Phoenix, Zillow recently launched a program that allows potential buyers to view properties in person without an agent present. Convenient showing options like this help negate the necessity of buyer’s agents, and Grinkmeyer predicts that these programs and others like them will expand to markets around the country within the next several years.
If this does happen, buyer’s agents stand to lose a lot of business.
With home buyers typically connecting with agents while searching for homes, taking them out of the equation at this point in the process may leave consumers wondering if they really need a buyer’s agent after all.
BUYER’S AGENTS AREN’T DOING THEIR RESEARCH
Even if self-guided showings don’t take off, Grinkmeyer still believes buyer’s agents will soon become obsolete based on his professional experience with them.
When a buyer comes to view one of Grinkmeyer’s listings, they’re often meeting their agent for the first time at the property. This is evidence that more and more buyers are finding potential properties on their own via sites that source data from the MLS.
And the agents who tag along to view these listings with buyers usually know next to nothing about the home, following their clients like lost puppies while Grinkmeyer gives all the details on the property.
Sure, buyer’s agents give their take on condition, features, and price, but that second opinion isn’t worth much when the agent doesn’t put adequate time toward researching the property in question.
TODAY’S BUYERS CAN NEGOTIATE ON THEIR OWN
Negotiation is another area Grinkmeyer has noticed diminishing value from buyer’s agents.
Thanks to all of the information available online, buyers can pull their own comps and generally have a good understanding of what a given property is actually worth.
More importantly, they know exactly how much they can afford and are willing to pay, which is what really drives the average property negotiation. Other details, like what minor repairs and closing costs sellers are willing to cover, don’t typically have a major impact on the total price paid.
Besides, most buyers are more than capable of negotiating these details on their own.
When buyer’s agents aren’t finding properties, researching the properties their clients want to buy, or offering much in terms of negotiation expertise, are they really worth half of the commission?
Grinkmeyer doesn’t think so.
Get more industry predictions
The obsoletion of buyer’s agents wasn’t the only major prediction Grinkmeyer made during our discussion.
He also predicted that most brokerages will be absorbed by the big players or put out of business entirely, that real estate commissions will plunge, and that Zillow will become the biggest company in the world.
For full details on these predictions and more, listen to my podcast interview with Kerry Grinkmeyer.
Pat Hiban is the author of NYT best selling book “6 steps to 7 figures — A Real Estate Professional’s Guide to Building Wealth and Creating Your Destiny”, founder of Rebus University and the host of Pat Hiban Interviews Real Estate Rockstars an Agent to Agent Real Estate Radio Podcast with Hiban Digital in Baltimore, Maryland. Follow him on Facebook or Twitter.