This from my Arizona Republic real estate column (permanent link):
Here’s an intriguing question: Given that it’s so easy to search for homes on the internet, why do you need a buyer’s agent?
Face it, if you use the MLS search tool on my web site, you’re seeing exactly the same listings I see. And you know better than I ever could what you like and what you don’t like.
By now, the home search process is at best a partnership between the agent and the buyer. In some cases the buyer and I will work together to perfect our search criteria. But many buyers simply search the available inventory on their own, emailing me the MLS numbers of the homes they want to see.
So why do those buyers need a buyer’s agent?
Realtors hoarded the MLS data for so long that even they came to believe it was the source of their value to buyers. But this is very far from the truth.
You don’t need me to search for listings, although I’m happy to do that. And you don’t need me to open lock-boxes. You need a buyer’s agent to guide you through what is in fact an arcane and perilous process — potentially a financial disaster. You might not need me to find your next home, but you need me to make sure that you get it — or that you pass on it, if that is what is truly in your best interests.
A skilled buyer’s agent will write the kind of purchase contract that will prove surprising to you at every turn, with every term and condition tailored to achieve your best advantage. Your agent will supervise the inspection process and negotiate the optimal solution to the repair issues. Your agent will be prepared for every pitfall in the escrow process.
If you bought and sold houses every day, you could do all these things yourself. It’s because you don’t — and because the seller and the listing agent are looking to take advantage of your naivete at every turn — that you need a skilled buyer’s agent as your steadfast champion in the home-buying process.
Steal this book: I’m going to write one or two more columns on this theme. If you want to use any of them on your real estate weblog, feel free. Just give me a link back to http://www.bloodhoundrealty.com/
lenny schwartz says:
if you got a feeling you where going to be sick… or better yet that your entire family was going to be sick…
and without paying a dime (or ever paying a dime)you were able to talk with a few doctors to determine who could best help you…
you could choose a free doctor of your choice… or just turn to the insurance company to help you…
what if these doctors were able to speak with you virtually at your convenience 7 days a week… day or night…
what if you chose a doctor… (possibly referred by some friends who also got sick and they all raved bout this doctor that cared for them as if they were his/her own and cured them all like magic)… and they then spend hours more with you and your family… gathering details about your past and present… ordering tests (still at no cost to you)…
what if the doctor sort of became like a best friend…
and just like your friends who recommencded him/her you all were cured…
this senario sounds way too too good to ever be even a tad true…
yet we all know where i’m going…
only some dumb-ass would choose to forgo the free doctor-of-their-choice and let the bill paying insurance company take charge of your search for a cure…
July 18, 2009 — 9:00 pm
Benjamin Ficker says:
Couldn’t have put it better. I love the “Steal this book” idea. It really helps out those of us that are not as articulate with our writing 🙂
July 18, 2009 — 9:46 pm
Benjamin Ficker says:
Forgot to subscribe and…
Lenny? What does that have to do with the post?
July 18, 2009 — 9:49 pm
J Messina says:
From a lender’s perspective, it raises a red flag whenever the buyer does not use a realtor. The underwriter has to make doubly sure the buyer did not buy a home at an inflated value. Buyers without a realtor can expect to delay the closing process at least a week, as it usually results in needing another appraisal.
July 19, 2009 — 7:19 am
Robert Worthington says:
Buyer still need an agent for the purpose of not over paying. The mls may supply listings but Buyers are not informed unless they are truly educated or represented through an agency relationship.
July 19, 2009 — 8:55 am
Tim Shepard says:
Some buyers don’t need an agent. These are the people that spend 100’s of hours doing independent research on their own and can develop a reasonable understanding of the process.
For the other 99.9% of buyers that do need my services, this is what I can do for them:
1. Show buyers homes in neighborhoods that fit their lifestyle but are unknown to the buyer.
2. Uncover developer incentives and discounts that aren’t reflected in listings or comparable sales.
3. Introduce them to my expert referral network of mortgage professionals, inspectors, and closing companies.
4. Structure contracts in ways that are favorable to my buyers giving them redundant contingincies that don’t turn off sellers.
5. Steer them away from known problems such as EIFS siding and properties in coastal flood planes.
6. Show them the absolute best homes at the best value.
7. Explain to them the impact of different tax millage rates depending on municipality.
8. Explain the savings in insurance by choosing one type of construction over another.
These things are second hand for me because real estate is my profession. Collectively, these items save buyers thousands of dollars and more importantly, significantly reduce the risk that they end up with a turd!
July 19, 2009 — 9:21 am
George Black says:
You are right, Greg, representing buyers is much more than finding suitable property. It amazes me when clients seem to think that finding a property is the largest part of what I do as an Exclusive Buyer Agent. Finding a place, though time-consuming, is often the easiest part of the process.
The real key to providing exemplary buyer representation is exclusivity. The fact that I can commit 100% to my clients with no conflicts of interest adds genuine credibility to my professional assistance. Guiding, counseling, evaluating, negotiating and strategizing can all be done with total loyalty and no danger of affiliated business relationships or fraternal influences of traditional real estate practitioners affecting the outcome.
Buyer’s agents within the context of traditional offices are often inexperienced at best and incompetent at worst. They are often the most inexperienced agents and used as glorified clerks in some cases. Here’s how power-lister and real estate trainer Dirk Zeller viewed them in his office. “My Buyer’s Agents…responded to other Agents’ inquiries about my listings. They handled the ad calls, sign calls, and open houses. Their job was also to respond to Agents who had written offers when I was out of town, which was every weekend, and to instruct those Agents to fax the offers to my office to be presented on Monday when I returned…” Dirk Zeller http://realtytimes.com/rtpages/20090717_compplan.htm
Readers of your blog, I’m sure, represent the best of the lot. Some agents as in everything else are going to be more knowledgeable and dedicated than others and will, thus, stand out. Yet, lurking in the background is the specter of dual agency, “designated agency” or “transaction specialist” or some such thing waiting to compromise an agent’s ability to be fully loyal to his client. Traditional agents of conscience and integrity have worked hard to find ways around these travesties of representation but to little effect.
Yes, as buyer agents we certainly do more than help our clients find property. But until agents permanently decide whose side they are on, the integrity of their client service may be justifiably questioned.
July 19, 2009 — 1:13 pm
David Losh says:
This after noon I talked with an accountant who worked for a Real Estate office for three years doing the books, got a license in 1999, then helped clients buy and sell property for seven years.
He was clueless about property. The paper work he was very comfortable with.
We were talking because he said his generation was more of a “do it yourself” generation. He was advancing the same internet theory you are in your post. The fact is most people know nothing about property, land use, future development, or economic trends.
I’ll say again that Real Estate is a highly predictive rational market. Many people get confused about that. People pay way too much for towering trees, babbling brooks, and white picket fences. The vast majority of people, myself included, need an agent in a Real Estate transaction.
July 19, 2009 — 3:52 pm
Doug Quance says:
There have been numerous times that I have told homeowners that I could tell that they bought their homes without the use of a buyer’s agent.
In each of those instances, it was because they paid too much.
For some reason, many people believe that by going directly to the listing agent – they will save money… or keep from being outbid by another buyer.
There’s an old saying:
A Buyer who represents himself has a fool for a client.
July 19, 2009 — 9:49 pm
Patsy Snyder says:
Many buyers think that finding and choosing the home they wish to buy is why they need a Realtor’s help. Yes, they do need a Realtor to show the home but that is the least that a Realtor does. Once a buyer chooses a home, the Realtor makes it close. The Realtor’s experience and expertise is invaluable to a home buyer, saving the buyer money, time and grief.
July 20, 2009 — 8:29 am
Al Lorenz says:
Perfect! Posted and linked to as well. You are a gentleman, a scholar, a marketing whiz as well as superb buyer’s agent!
I really can’t imagine why anybody in the real estate industry doesn’t read this blog every day.
July 20, 2009 — 9:16 am
edbtz says:
As a consumer living in CA who came across this blog by accident, I could not understand, when signing the CAR docs to use a REALTOR, how the agent could represent me (the buyer) and the seller in the same transcation. I didn’t want to agree to this term but my agenct told me I had to otherwise he could not represent me. Is this true? If so, is this not a conflict of interest?
July 20, 2009 — 12:22 pm
Greg Swann says:
> I could not understand, when signing the CAR docs to use a REALTOR, how the agent could represent me (the buyer) and the seller in the same transcation.
It’s called Dual Agency. It’s the real estate broker’s favorite method for losing lawsuits. If you search BloodhoundBlog for dual agency, you will find a ton of information — most of it negative.
July 20, 2009 — 5:17 pm
Scott Grace says:
You need a buyer’s agent because the seller’s agent already has a contract with the seller to get the best possible price on the best terms for the seller. How can the seller’s agent work effectively for the buyer under these circumstances? Don’t get me wrong…I love double-ending! But really though…It is in the best interest of the buyer to have their own agent most of the time.
July 20, 2009 — 4:57 pm
edbtz says:
thankyou.
July 21, 2009 — 11:37 am
edbtz says:
thank you.
July 21, 2009 — 11:38 am
Petra Norris says:
There is no doubt when buying a home, you should have an experienced buyer’s agent on your side. Granted, looking for homes is done easy and made easy – even a child can do it. When it comes to contracts, especially with short sales and bank owned properties, negotiations and overseeing the whole real estate buying transaction, it is a must – having an Realtor(r) on your side.
July 21, 2009 — 1:14 pm
Greg Dallaire says:
Greg,
You really touch on all the points of what I explain to my clients and potential clients. When I have my first meeting I explain to them what my job is and educate them on why they need me as a buyers agent. They usually chuckle when I tell them that really anyone could open up doors and show them houses but my real job is to educate them on this ever changing process and to make sure that their interest’s are put in the front of the line.
When I’m working with a new buyer I always talk to them about how i’m concerned that they pick a home that is right for them. I’m not here to push them into any transacation because my business is built on referrals and if I push them into a transaction they won’t be
referring me out to anyone quite the opposite.
Once I take all of the sales pressure off people make decisions and they make them alot faster then if the pressure was there.
July 22, 2009 — 6:39 pm
David Losh says:
This post got me thinking so I checked in our market place for redfin sales, and listings. redfin has 230 closed sales in the Seattle market place, or more accurately all of Washington. A single guy in my office has 35, by himself.
That’s not the issue. When looking at these closed sales it looks as though people are paying retail prices. Three properties in my neighborhood appear as though people paid too much when using redfin. One house that the local agents shunned as a listing because the owner wanted $60K over CMA sold, by redfin for $25K over CMA, washer and dyer not included. The only way the house appraised was by new construction, spot lots, in the area.
Another house, which I admire the listing agents for, sold for asking price after two price reductions. The agents staged the home flawlessly and the online experience of the home was spectacular. That doesn’t change that the house is on a busy street and in need of repair beyond the paint job the house got.
In terms of listings that redfin sold it was the usual price reductions then a pattern of offers less than asking.
This selling season is a disaster for consumers. Brokerages are all over the place on pricing, but those prices are high. The same is happening all over the country from what I hear. People are buying at 2004 and 2005 prices and in some cases more. Even if your area is depressed with foreclosure sales consumers are picking up properties for more than what they were six months ago.
My point is that when I make low ball offers for clients it’s to get them a deal. Selling a property is about the deal. Playing the Real Estate game is about getting value. No matter what is happening in the market place the web 2.0 experience doesn’t seem like an answer for the consumer.
You can pay too much using a Brokerage, but when you do the looking, then sweat the offer, and end up with a product that has only had an inspection I don’t see a savings. I don’t see a service.
July 23, 2009 — 6:55 am