A report from the National Association of REALTORS® suggests that homebuyers are increasingly shopping for homes without buyer’s representation. That means there’s no one to help them negotiate terms in their favor. While sellers’ agents can facilitate a sale for the buyer, their fiduciary responsibility lies with the seller to get the highest price and best terms.
Only 57% of homebuyers who bought a home using a real estate had buyer representation - down from 64% in 2006. And just 37% of homebuyers first learned about the home they purchased from a real estate agent, down from 50% a decade ago.
Why the change? A number of reasons. First, the bubble and implosion in housing values has made buyers more cautious. Meanwhile, websites and homebuying apps have cropped up, assisting buyers in ways not possible only a few years ago, with such wonders as tax roll data, interior views and satellite images. Last, buyers have been on the sidelines so long, that they are entering the market with more maturity and confidence in their own abilities than the buyers of past generations.
What buyers may not realize is that it’s the real estate industry that is making this new transparency possible. New licensing laws allow agents to work with both buyers and sellers as both fiduciaries and non-fiduciaries, depending on state disclosure requirements.
When an agent contracts with a seller to sell their home, the agent contracts commission fees with the seller to cover the costs of paying the buyer’s agent. Buyers may not realize that most agents are paid at the closing, and that they won’t be out any upfront money to hire their own agent.
Buyers’ agents multiply the buyer’s chances of finding the right home at the best price. They network with other agents to find the right home and they learn which homes are coming onto the market before the general public. Many homes are bought and sold without a sign ever going into the yard.
But, if a buyer goes to open houses, or builder model homes without registering their buyer’s agent’s name , or calls on a listing without mentioning their agent, the listing agent or builder’s agent has every right to assume the buyer is unrepresented. They may refuse to pay the buyer’s agent commission.
Today’s agents are like today’s buyers and sellers. They’re more technology-savvy and willing to work hard to please their buyers. They know that buyers eventually become sellers, and sellers become repeat buyers.
That’s how good agents build their businesses, through repeat business and referrals. They are highly motivated to do the best job possible for homebuyers.
Why wouldn’t any buyer want to take advantage of that?
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