So often do I meet people in various social settings that have recently made a home purchase and, since I am a real estate agent, of course I am given a blow by blow of their usually disappointing experience. The process did not go as smoothly as they thought it should, and the finger is invariably pointed at their real estate agent. “Oh how we wish we used you,” they say. “Had we only known you when,” they say. I listen politely, and sometimes there is genuine blame to be placed on the agent, like a situation in which a buyer signed contracts for a home with grossly misrepresented taxes (more on this later). But more often than not, the complaints that I hear are regarding things that are either outside of the agent’s control, or outside the core of their duties. Real estate agents are an easy target, however. Salespeople are the #2 most mistrusted profession in recent polls by Forbes magazine, and Inman reports that Realtors are ranked among least trusted professions. When you think about it, it’s not unreasonable to be somewhat skeptical of the advice given by a professional who gets paid solely if they close you. It doesn’t help matters that the home buying process, particularly in our neck of the woods, is daunting and confusing to many, especially rookies, and often misrepresented on TV. It’s hard to know what to expect of the process or your agent, and many of my colleagues do not sit down for initial consultations with buyers to set proper expectations of the relationship and process. So there is a need, it seems, to set the record straight about what a good real estate agent should be doing for you, and what is non-essential. Let’s start with the most common complaint I’ve heard, which is: “my agent never sends me properties.”
“I had to find my house myself,” is a common gripe. Well, guess what? I’m about to say something that will rock your world. You should be finding houses on your own. Yes, my friend, HGTV has misled you. If you expect to sit back and not play an active role in your home search, you are guaranteed to be disappointed with every Realtor on the planet. These are not the 1996 Glengarry Glenross days, folks. Back before the advent of the internet, information about properties that were on the market was obscured, and the main point of securing a real estate agent was to be able to see the available inventory. That was then, this is now, and no longer are brokers the gate keepers to inventory. In the early 2000’s, online industry disrupters emerged in the form of websites like Trulia, Redfin and Zillow. Later, sites like realtor.com and others revved up their game and soon all brokerages invested heavily in their own respective search engines in order to compete. As a result, there are literally hundreds of real estate search engines out there, all displaying the same properties by tapping into the very database that agents use – the Multiple Listing Service (MLS). Home buyers now have access to all the listings that Realtors see, they can create customized, tailored searches narrowed by an extensive array of criteria, and get alert notifications as soon as properties in their criteria hit the market.
There is so much transparency in our industry that, unless you are internet challenged or blind, you are likely much better and quicker at spotting properties you like than we are. Why? Because you are glued to your phones/apps/computers 24/7. And I assure you, there is no secret, hidden stash of properties that we hoard. The vast majority of sellers opt to have their houses listed on MLS when they sign with a broker, and pocket listings are illegal. While there are certain instances in which an agent is privy to information about homes coming soon to the market, those properties cannot legally be shown until they are active and live on the MLS. Having said that, there is transparency even with pre-listed inventory nowadays, as “coming soon” campaigns have recently been sanctioned and are now featured on popular real estate websites. In short, there is practically nothing we can show you that you cannot (and do not) easily find on your own.
Let me explain the plight of a real estate agent that is trying to send you properties. You know the girl who claims to want a sweet, sensitive smart guy and insists that looks don’t matter, and then ends up with a hot, muscle bound hunk of flesh who’s brain power was seemingly extinguished in the last round of steroids? If you’ve ever befriended a girl like that, then you understand the frustration that real estate agents face in the match making process. The home selection process is so personalized and individual that pairing a buyer with their perfect match is akin to finding a needle in a haystack. Furthermore, the search process is so ever-evolving that buyers themselves don’t always necessarily know what they are looking for. I used to spend a good deal of time sending properties to buyers’ that, on paper, were perfect and checked every box on their list, but 90% of my suggestions were shot down. The other 10% they’d found before I did. And in 9 out of 10 cases, buyers that I work with have ended up with totally different properties than the ones they set out to find, and sometimes in vastly different areas. “Buyers are liars” is an adage much cited by real estate professionals, who rant ad naseum (if you let them) over buyers that only want to see one type of home, and end up purchasing the complete opposite. While we sometimes get lucky, the reality is that 99% of you end up identifying the property that you ultimately buy before your agent does. In fact, 99% of you start your home search online prior to even finding an agent. Do I still send my own buyers properties? Yes, but, it is more of a gesture than anything else. Unless a buyer is internet-challenged, I perceive it to be a futile effort.
You know how on House Hunters the buyer is shown 3 perfect homes, all of which were not advertised or marketed anywhere and could not be identified without the agent showing them, and then the buyer selects 1 of the 3 to purchase after 30 minutes. That is not an actual thing, just so you know. In reality, if we can manage to find just one viable prospect that is fully available and within your budget in this market labored by a chronic inventory drought, you are lucky. And if we find it online before you do, that’s a bloody miracle. More often than not, when you (yes, you) find it, it is either not within your budget or already has several offers. In time, the amenities, areas and/or price range of the homes you favorite will increasingly stray from the original criteria with which you furnished your trusty ol’ agent. That’s ok! The home search is a learning process and your criteria is expected to evolve and change over time. We forgive you for being “liars,” but you must in turn forgive your agent for being unable to stay current on your ever-changing criteria and the information super-highway. And honestly, that is not even close to where our value lies.
You see, it’s not finding the home, but rather buying the home that is treacherous, unglamorous and not shown on HGTV. You don’t see the part on House Hunters where the buyer loses the prized home after shelling out $1000 for inspections because he got outbid, and then proceeds to lose out in a string of bidding wars on other houses. You don’t see the part where two agents haggle over which party is going to pay for the air quality test after mold was discovered in the attic by the inspector. Let’s face it, you don’t need a wartime consigliere to help you find properties on the internet, you need them to help you navigate the rocky path towards home ownership. Indeed, the best agents are usually too busy rolling up their sleeves and getting under the hood to be consistently emailing new properties that meet inconsistent criteria. So that brings us to the highest and best use of a real estate agents’ service. What should your agent do for you if not sending you properties? A good agent will do the following:
- Evaluate a potential purchase from an investment standpoint. Identify, for example, any external obsolescence that may affect resale.
- Spot potential red flags, like a roof that appears to be nearing the end of it’s useful life, a 100 amp electrical panel that is maxed out and not up to code, windows that show signs of condensation between the panes, utilities that appear to be outdated, etc. Although we are not home inspectors, many of us with a healthy amount of deals under our belt have witnessed enough to be able to forewarn clients prior to spending money on a home inspection of possible conditions that may rear their ugly heads in the near future. If you can catch the major issues prior to the inspection, you can negotiate them before even coming to an agreed upon price with the seller, or choose to walk away entirely.
- Negotiate to get the lowest price possible and provide advice and strategies that will win their clients the house they desire.
- Provide comprehensive market analyses with detailed adjustments to help inform the offer price.
- Provide referrals to the most reputable and experienced inspectors, lenders, attorneys, and other industry professionals.
- Verify town records, square footage, taxes and certificates of occupancy; look for surveys, check for open permits and identify any outstanding building issues that may delay closing, jeopardize the sale, impart liability or affect resale in the future.
- offer insights on towns and municipalities (e.g., which provide bussing for schools and which do not, which towns perform annual tax reassessments and which do not).
- Above all, offer expert guidance and walk buyers through the process.
A good real estate agent can help you save hundreds to thousands of dollars. For example, locating a survey on file with the town can save the buyer up to $800 on having to purchase a new one if the title company is able to update it. A good attorney can make or break you, and can mean the difference between closing on a house or losing it all together. A lender referral can save you a lot on monthly payments. For instance, my recommendations have saved several clients, otherwise primed to be tossed into the FHA bucket for having a less than pristine loan profile, from a lifetime of hefty monthly PMI payments. Many of my colleagues have helped rescue deals that were on their death bed with a quality lender recommendation. Referrals for the top, most prolific local professionals in the industry are priceless. Cross-checking listing data is also a pivotal function of a real estate agent, and invaluable in saving time and money. As mentioned in the example from the first paragraph, I recently learned about a buyer that signed contracts on a house with grossly understated taxes. The taxes were, in reality, several thousands of dollars higher than what was quoted in the listing. Since there is no contingency for the accuracy of listing data in the standard contract of sale, she was forced to proceed with the purchase or lose her down payment, and will have to file a civil suit to seek restitution. Had her real estate agent verified taxes prior to contract signing as he/she should have done, the buyer would have had the option to either back out or proceed with a lower offer. Speaking of taxes, the nefarious consortium of towns moving to 100% equalization in 2017 has added further precariousness to the home buying process in our area. Knowing which municipalities are presently undergoing re-valuations, and those that are planning it for the immediate future, can be game changing for your home search. If your love of a property is at all influenced by it’s surprisingly low taxes, and it is an outlier in that regard, it is helpful to know in advance of purchase what the town currently thinks that home is worth and whether or not the local municipality performs annual assessments. With the aid of your agent, you will be able to find out, or at least be connected with a qualified local property tax expert that can give you the tea. Those taxes may or may not drastically go up upon purchase when the deed crosses the assessor’s desk.
As you can see, there is a lot that goes into buying a home. Still think the primary function of an agent is to send you properties?
Thanks for sharing this post!!!
A really entertaining read.
So basically; since more of the responsibility of buyer agents have shifted to the buyer themselves, how do you justify the agent getting 2.5% at the closing table? My wife and I have found the only 8 properties we have viewer so far. Our agent? Zero. In fact, we just missed out on a house that double checked every one of our boxes. It went under contract the day after we found it. 45 days after being on the market and our agent couldn’t be bothered to send us a link to the listing. It’s a racket. 1% is all todays buyers agents should be getting and even that is hard to justify.
I understand your frustration. If you are missing out on houses, you might need to adjust your settings/criteria, and pick a better search engine. Some websites are better than others. I find Redfin to be excellent as far as saved searches go. Having said that, I always recommend agents set up a saved search directly from the MLS for their buyers. I would ask your agent to do the same, and also set it up so that he/she is cc’ed on the alert. This is what I do. When I see properties that I think will fit the bill, I text my client to make sure they saw the email alert. As far as commission goes, agents generally have to split the commission with their brokerage, so after fees, etc., they probably make closer to 1% than you realize. In terms of an agent’s value, I find that the heavy lifting comes into play at the negotiation table. A skilled agent will be able to offer expert advise to win you the house above other bids. Or, in a buyer market, use expert strategies to get the house for as low as possible. What separates the “men from the boys” if you will pardon the expression, is an agent’s experience and negotiating skills. Value is also to be found in walking you through the rather arduous and often confusing process, assisting with due diligence on the home, pulling town records, recommending professionals, providing valuable moving/closing resources, etc.