This is my column for this week from the Arizona Republic (permanent link):
Net-borne buyers create new burdens for listing agents
“Eighty percent of buyers start their home search on the internet.”
You don’t have to dig too deeply in the real estate world to unearth that statistic. There are two problems that I can see with the claim.
First, it’s based on an outrageously unreliable mail survey of recent home-buyers. Fewer than five percent of recipients returned the survey. How did the other 95% manage their home search? We don’t know.
Moreover, while the long-term trend, surely, is that more people are using the internet to shop for homes, what matters is not how they started their search, but, rather, how did they finish?
There’s more to think about, though, because it seems reasonable to me that people who are starting their home search without professional representation — without a Realtor — are continuing their search unrepresented as well.
What’s the implication? Like it or not, the listing Realtor’s responsibilities are increasing.
Realtors like to say — to each other — “If you list, you last.” What that means is that a listing, at least in a normal market, is a pretty secure paycheck, where working with buyers can be a lot riskier. This is the reason that the buyer’s Realtor often gets 60% or even 75% of the gross commission. The listing Realtor presumes that the buyer’s Realtor is going to be doing most of the heavy lifting.
But this is not as much the case in the age of the internet. If an unrepresented buyer clicks through to the listing Realtor from an on-line Realty.bot — or if that buyer simply makes a sign call — the listing Realtor is obliged to show the home, even if the original intent was to have buyer’s Realtors doing all the work. Moreover, the open house, long derided by Realtors, is suddenly much more important.
All of this creates new opportunities for dual agency, whereby the listing Realtor gets paid more — and incurs huge risks — while giving the buyer almost nothing in the way of representation. It’s hard to argue that this is an improvement, but it seems to be the way things are trending.
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