Austin TX Real Estate - Hill Country Austin Lakeway Homes for Sale: NAR Reports only 60% of Buyers Use a Buyer's Agent

NAR Reports only 60% of Buyers Use a Buyer's Agent

The 2011 NAR profile of Home Buyers and Sellers came out with some very interesting information, and I've been taking it all in. Something that caught my attention is that only 60% of buyers worked with their own Buyer's Agent.  With all the NAR advertising and Marketing about how Buyers should contact a local Realtor in their area, I'm surprised the number is so low.

The rest of the stats is that 89% used a Real Estate Agent or Broker.  So, out of 89%, only 60% of them used their own representation.  40% of them used the listing agent?  That seems wrong.  That's almost like saying every 2-3 listings I sell, I'll get to double end the deal, but that's not what happens. In my 11+ years, I've double ended a deal about 6-7 times. That's less than one every other year.

Some brokerages won't even allow their agent to double end a deal, which I think is "silly", but to each their own. This isn't about whether or not you believe an agent should represent both sides. This is about how only 60% of 89% felt it was necessary to obtain their own representation.

How can we get that number to increase? Is it NAR's responsibility to continue to educate the public? Is it the individual market's responsibility? Is it the responsibility of the main Brokerages across the country?

I just can't imagine that 40% of the buyers out there aren't using agents to buy their homes.

Before someone says that the 40% must be trusting builders or going FSBO, those numbers are accounted for already.  To make up the additional 11% on top of the 89%, NAR reports that 7% bought directly from a builder and 4% bought directly from the home owner.  That still leaves 40% of the 89% not using an agent...

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Donna Harris, REALTOR®
RE/MAX Austin Skyline
www.DonnaHomes.com
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*
NAR Reports only 60% of Buyers Use a Buyer's Agent * was first published on donnahomesblog.com.

Comment balloon 78 commentsDonna Harris • December 06 2011 11:57AM

Comments

Hello Donna:

There are lots of potential explanations. My own brother thinks he will get a better deal if he purchases directly from the listing agent despite my insistence it doesn't work that way.  Go figure.

 

Posted by Brian Rugg, Sun City TX Real Estate - Georgetown, TX Real Est (Rugg Realty LLC Sun City Texas 512-966-3200) almost 7 years ago

Much higher percentage than I would have imagined myself.  If it is the responsiblity of the main brokerages I just think we are all too small of a company to get the word out. 

Posted by Kristin Moran, San Antonio,TX - Real Estate - 210-313-7397 (Owner - RE/MAX Access - KristinMoran@Remax.net) almost 7 years ago

40% of buyers are probably using agents...they are using the seller's agent. I've met many of them. They come to our open houses. They call listing agents for viewings. They believe the listing agent will give them a better deal if they don't have a broker. They seem to think that they are entitled to the buyer broker's compensation if they don't have one.

Posted by Mitchell J Hall, Lic Associate RE Broker - Manhattan & Brooklyn (The Corcoran Group) almost 7 years ago

Donna

Approximately 18% of listing in the Napa Valley are sold by the listing agent. From my experience, I would estimated 10-15% of buyers I have talked to, have asked for the listing agent at first call.

Since it is not the practice here to sign buyer broker agreements, I wonder if  NAR counts this in their statistics, i. e. maybe other agents in the same company and/or other agents in another company??

Posted by Curtis Van Carter, Your Napa Valley Broker Extraordinaire (Better Homes & Gardens Wine Country Group) almost 7 years ago

I don't count on the NAR to do anything other than advocate for me, legislatively. As a two person shop, I'm obviously not going to count on the large brokerages for anything. It's my business, and it's my responsibility to promote myself and my service.  Thanks for the post!

Posted by Chris and Berna Sloan, Tooele UT (Group 1 Real Estate) almost 7 years ago

Do they include new construction where the buyer don't know they need representation? Very interesting stats. I will park here to see what others comment.

Posted by Ritu Desai, Virginia Realtor-Fairfax/Loudoun/PW-703-625-4949 (Samson Properties) almost 7 years ago

Brian, Siblings don't think we know better...

Kristin, I mean the big mother companies like Remax corporate, C-21 corporate... they all have a mother somewhere.

Mitchell, and that's where educating the public comes in handy as we all know the commission contract is between seller and listing agent, not buyer and seller.

Curtis, With prices out there, no wonder an agent can sell only a couple of houses a year and still pay their bills.

Chris, And collect dues...

Ritu, New construction is in the 7% outside the 89%.

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) almost 7 years ago

It sounds like us buyer agents have a lot of educating to do.  I wonder if they were asking about buyer agents in general or exclusive buyer agents.  I know many do not make the distinction....except for us EBAs.  

Posted by Christine Smith, Exclusive Buyer Agent & Attorney, Canton, MA (Buyers Brokers Only LLC - www.BuyersBrokersOnly.com) almost 7 years ago

Are you sure that doesn't mean that X work with an agent but X% 'formly' hire an agent as their rep in writing? I think that's what it means or at least what I got out of that report when I read it. 

I work with many people that feel they don't want to sign anything.  I tell them how we are going to work & they say fine, we have a deal.  No signature but I have their agreement & honor.

Posted by Lyn Sims, Schaumburg IL Real Estate (RE/MAX Suburban) almost 7 years ago

I know these stats are national survey and NAR report numbers, but locally in my area, most buyers do use a buyers agent.  I find it odd that a buyer would not have representation.  I do get questions about that from new clients and I explain the representation options to them.  Perhaps NAR needs to do a better job of educating the public.  Or...agents on their own LOCAL levels.

Posted by Christine Bohn, The Bohn Team, Gainesville FL (RE/MAX Professionals) almost 7 years ago

Buyers are slowing . . . slowly getting it in my market.  They need more education, and I try.  The numbers don't surprise me nationally.  Many agents still practice with the double-dip being their only reason to exist. 

Posted by Carla Muss-Jacobs, RETIRED (RETIRED / State License is Inactive) almost 7 years ago

Donna - I think this may reflect that a lot of cash investors think they're savvy enough to go it alone.  I recently read that a majority of REOs are being purchased from investors as flips or rentals and many of these folks with only work with REO LAs.  I strongly suspect that REO listing mills frequently double side their listings.

Posted by Donne Knudsen, CalState Realty Services (Los Angeles & Ventura Counties in CA) almost 7 years ago

Hi Donna,  Interesting stats and comment thread.  Not sure I would say that a buyer working with the listing agent is without representation.

Posted by Bill Gillhespy, Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos (16 Sunview Blvd) almost 7 years ago

Hi Donna - In Colorado, buyers who are using an agent may choose to have that agent represent the as buyers agents - probably the 60% - or transaction brokers. The number of transaction brokers here is high, because the brokerages like it - a transaction broker has limited responsibilities to the buyer, hence limited liability for the brokerages. Some brokerages only allow their agents to be transaction brokers. It could be that distinction is part of the difference.

Posted by Dick Greenberg, Northern Colorado Residential Real Estate (New Paradigm Partners LLC) almost 7 years ago

Donna, I agree with the commenters who say consumers perceive they will get "a better deal" by going with the listing agent. They just do... they don't get it.   Also, please understand for many buyers the agent who lists the house is the one who knows all about it .. so if they have questions about it or an interest in it .. they are now supposed to go find a totally separate agent who's never laid eyes on the property so they can find out more??? That just seems illogical to so many people.

Posted by Judith Sinnard, The SMARTePLAN Lady (SMARTePLANS; Houston, Texas) almost 7 years ago

I agree with Chris #5, as small business owners, it's up to us to promote ourselves and our services in a way that potential clients can easily connect with and offering educational content, like we find on AR, is certainly one way to accomplish that.

 

Posted by Nancy Laswick, Your REALTOR® For The Valley Of The Sun (United Real Estate) almost 7 years ago

Well, Donna, not surprised at it! I feel there is a lack of ethics on both ends. I had a buyer made an offer for my listing through an agent initially and then called me anonymously (I did recognize him, though, and caught him) to see if he can get a 'deal'.

On the other hand, some of my buyers were offered incentives if they work directly with the agent.

Who should we blame?

Posted by Praful Thakkar, Andover, MA: Andover Luxury Homes For Sale (LAER Realty Partners) almost 7 years ago

Donna, I tend to agree with Donne that a significant portion of that 40% are investors and other cash buyers that are "going it alone". I've also run into a lot of buyers that think they'll get a better deal using the LA. 

Posted by Chiara Petro, Your KEY to Home Sweet Home - Knoxville TN (Realty Executives Associates) almost 7 years ago

Lack of education Donna. In my area, Buyer Agency was born in 1992. Most buyers do not realize they can have representation when buying a home. Homeowners get representation when selling and only use 1 listing agent solely. Sometimes parents of buyers are old school. They bought their homes through the listing agent 20, 30, 40 years ago and think it should be done the same way now.

As listing agents it's our job to get the highest offer for our sellers. If I bring in the buyer for one of my listings, rest assured that buyer isn't going to steal the house. I work for the seller. Maybe some buyers feel that the listing agent will under-cut the seller in order to keep the entire comission. If that is the case, I wouldn't want to work with anyone that thinks that way.

I educate every buyer I meet. I show them the facts about buyer representation. If they want to work with other agents and myself, I tell them I do not work that way. Most stick with me. It's all about educating and it starts with us agents.

Posted by Jackie Connelly-Fornuff, "Moving at The Speed of YOU!" (Douglas Elliman Real Estate in Babylon NY) almost 7 years ago

Here in my area many people just call the agent on the sign. I try to educate my customers and clients but often times to no avail.

Posted by Mike Frazier, Northwest Tennessee Realtor (Carousel Realty of Dyer County) almost 7 years ago

Let's face it, agents want listings to get buyers. How many of those agents are going to tell prospective buyers they should have their own representation. Certainly not before trying to sell the buyer their listing.

Once it's obvious the buyer isn't interested in the listing, then the agent may say something to the affect of having representation but it's not guaranteed.

How are we suppose to get the info out? I regularly blog about this topic but from what I hear around my office, not many people are actually having this conversation with buyers. Why? Because they list properties to leverage their business.

Posted by Tammie White, Broker, Franklin TN Homes for Sale (Franklin Homes Realty LLC) almost 7 years ago

You know Donna I believe the stats. I am doing a deal now where they are using me because I was the listing agent on a house. now that is not the one they are buying but that is why they are using me. I like you am not so lucky in the double dipping game. But i do believe based on what I have seen that it is true

Posted by Charlie Ragonesi, Homes - Big Canoe, Jasper, North Georgia Pros (AllMountainRealty.com) almost 7 years ago
It's been my experience that these folks are almost all "represented" ... by the listing agent. What they don't understand is that the listing agent's primary responsibility is not to them, but the seller. A heart "Amen!" to those who've advocated here for better education.
Posted by George Lawson almost 7 years ago

Congratulations on the feature Donna. I have to tell you that the last 3 years especially i have seen more buyers contacting me direct on my short sale and Bank Owned Listings.  The majority of the buyers consider themselves comfortabale in working with the listing agents direct for the advantages it gives them on Bank owned homes.

Posted by Scott Godzyk, One of Manchester NH's Leading Agents (Godzyk Real Estate Services) almost 7 years ago

Yep!  If the study was for new homes only, the percentage that buy without an agent is probably 90%.

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) almost 7 years ago

I believe the numbers probably are correct.  But my Buyers are all under contract.                            

 

Posted by Jerry Morse, BBA,GRI (The Morse Company) almost 7 years ago

This has been an odd year for me - in 45% of my closings I've represented the seller, and helped the buyer as a customer (customer acknowledgement signed).  Thats quite a bit higher than normal for me.  I do have a niche market, so often my specialized knowledge is attractive to buyers.  But I'll admit I'm surprised to see those NAR stats play out in my own practice - at least this year. 

Posted by Jeanne Dufort, Madison and Lake Oconee GA (Coldwell Banker Lake Country) almost 7 years ago

Ultimately, if a buyer approaches me about a listing, I don't refer them to a buyer's agent.  But dual agency doesn't happen to me too often - most buyers end up buying something else than the property they called me about.

But those numbers are amazing.

Posted by Margaret Goss, Chicago's North Shore & Winnetka Real Estate (Baird & Warner Real Estate) almost 7 years ago

It is a remarkable or unremarkable thing. I find it the most challenging aspect of the business. Being able to continually articulate our value proposition. I recently had friends of mine contact me to tell me there were selling their home as a FSBO and wanted to let me know they were doing this. I asked them what they were doing after the home sold. Oh, they had a several acre plot of land under contract. How did you buy it? Contacted the listing agent and had a cousin who in the title business read over the contract. What? You are kidding me. No, I did not say it, but thought it. I do not see what advantage there is in doing it that way. I believe people simply do not understand the advantage of an agency relationship. Nor do they actually understand all we do to make the transaction a success.

Cal

Posted by Cal Yoder, Homes For Sale in Lancaster PA - 717.413.0744 (Keller Williams Elite) almost 7 years ago

In my experience this is NOT the case and far more buyers use a buyers agent. I agree that NAR are not doing a good job in advocating buyers agents with these statistics.

Posted by Ellie McIntire, Luxury service in Howard County & Catonsville (Ellicott City Clarksville Howard County Maryland Real Estate) almost 7 years ago

Donna,

NAR is counting "Listing Offices" as agents.  That's why the double-end percentage is so high.  Two different agents in one office is deemed "double-end."

Regarding so few buyer agents...that's also each of our faults.  Each agent needs to be able to justify and explain the benefits to a buyer of having a representative.

Posted by Lloyd Binen, Silicon Valley Realtor since 1976; 408-373-4411 (Certified Realty Services) almost 7 years ago

This is indeed a very interesting statistic. 

Posted by Former Agent (None) almost 7 years ago

Donna it seems logical that a large portion of the 40 percent was investors who bought up a lot of the foreclosure and I noticed many times those listing agent had both sides.

Posted by Jennifer Fivelsdal, Mid Hudson Valley real estate connection ( JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571) almost 7 years ago

I am a little surprised by the statistics.  However, I tend to agree with Jennifer that many of the homes were bought by investors who likely paid cash.  In addition, quite a few new home buyers tend to purchase directly from the builder choosing not to use the services of a Realtor. 

Posted by Lisa Dunham, Associate Broker, Alexandria Virginia Real Estate almost 7 years ago

I do believe that there is the misconception that there is a fee for a buyer's agent. I try to do my part to educate everyone I know about this. 

Posted by Rosalie Evans, The Evans Group, Sioux Falls, SD Homes For Sale (Meritus Group Real Estate) almost 7 years ago

I think your statement explains it all "....With all the NAR advertising and Marketing about how Buyers should contact a local Realtor in their area"   NAR say contact a local Realtor, but the NAR commercials never encourage the consumer to have a Buyer Agent...or the benefits of a having a Buyer's Agent.  Unfortunately ABR doesn't do much to educate the public either.  It is a real disappointment.  However, the industry has been and continues to be very seller oriented... and some even think that the buyer is sort of that "necessary evil."

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) almost 7 years ago

I've heard from many buyers that they want to call the listing agent to get the real scoop on the property.  They think they have majic powers.

Posted by Deborah Wilson, Stark County OH Real Estate (Hackenberg Realty Group) almost 7 years ago

The internet give a false impression or security to buyers and sellers. Sounds like we have to reconsider how we are educating the public. If these numbers are true then we are in trouble

Posted by Doug Dawes, Your Personal Realtor® (Keller Williams Realty - Topsfield, MA) almost 7 years ago

Donna -- I still have buyers who ask me how much I charge. They also tell me that if they go to the listing agent, they will get a better deal.  The education and understanding of the role of a buyer's agent and why a buyer must have one is definitely falling short.

Posted by Barbara Altieri, REALTOR-Fairfield County CT Homes/Condos For Sale (RealtyQuest/Kinard Realty Group, Fairfield and New Haven County CT Real Estate) almost 7 years ago

The 40% does not seem to off base when you consider all the investors who are buying today.  Many of the sophisticated ones do not use an agent allowing the listing agent to keep both sides.  We do that as well as use an agent, depending on the deal.  Combined with the homeowners out there who do not want a buyers agent or who buy on some kind of owner finance or lease purchase and this number while maybe a little high doesn't seem too off base.

However almost every new homebuyer I find seems to think there is a charge to use a buyers agent.  And in some cases there is as I know many buyers agents who will charge for their time.  They don't want to waste time with buyers who are not serious which there is quite a few of even with todays deals.  Never a dull moment!

Posted by Frank Iglesias, Atlanta, GA Real Estate Investor (Working With Houses, LLC - Atlanta Real Estate Investments) almost 7 years ago

This surprises me, however if agents don't practice their skills they do have problems getting the buy in from potential buyers. 

Posted by Yvonne Burdette-Van Camp, "Home"work, I have the Answers! (To Buy and Sell Real Estate, see me at Southwest Missouri Realty) almost 7 years ago

Donna - while the number/percentage may seem low to some it is high to others ..... I don't have any stats locally but I suspect, at least from my own experience, it is the other way around.

Posted by Kathy Clulow, Trusted For Experience - Respected For Results (RE/MAX All-Stars Realty Inc. Brokerage) almost 7 years ago

My office specializes in commercial property, and we dominate the market. In fact, last year, we accounted for 53% of the commercial transaction sides. Because we have the specialized knowledge, we often end up, as a company, with both sides of the transaction. That's just how it plays out here in my backyard...

Posted by Tim Bradley, Commercial Real Estate Expert in Jackson Hole, WY (Contour Investment Properties) almost 7 years ago

Donna, the sad part is that buyers do not pay for a buyers agent (unless there is a small brokerage fee, Keller Williams is $195).  But with everything a buyers agent does; work exclusively for them, help them find the perfect home, write up the offers in THEIR best interest,  negotiate on their behalf, inspections and organize the whole process from showing them houses to closing the transaction it's amazing that a buyers are not aggressively looking for a buyers agent.

Posted by Steve Warrene, Pittsburgh Real Estate Investment Specialists (Your Town Realty) almost 7 years ago

I've always had a bit of trouble with the buyer agency issue.  Maybe because it was so foreign in the 70's when I started.  We were honest and upfront with any material facts we knew about the property and when buyer agency came in to vogue it seemed to create an adversarial atmosphere.  Some people felt they were going to be taken to the cleaners unless they had a buyer agent. And that concept seemed to be promoted  in thre industry. In the 90's it appeared to be a way to weed out the "looky loos" by "listing" them as you would a house for sale.  The buyer agent doesn't present an offer in our area. With disclosures and inspections-the property and surroundings can be thoroughly investigated. The offer is handed off to the listing agent and the seller and buyer eventually decide on what they both can live with. Negotiations used to be arduous because a buyer would assume the buyer agent would get them the deal of the century. There were a lot of unrealistic expectations. I do like the separation of an agent for each party for liability purposes, and we've come a long way with the fine tuning,  but to me, if you are going to be a buyer agent, you have to perform like you are helping your children buy a home.  I'm not sure you can give that extreme level of care.

I betcha this will make the phone ring!  What are your deep, never spoken thoughts about this?

Posted by Barbara Tattersall, GRI (Keller Williams Realty Metropolitan (Keene,NH)) almost 7 years ago

Donna: I am in with #48--there is no real need that is met by a buyers agent, according to what I hear from the buyer--I have had many more buyers ask me to help them even though I am a listing agent, simply because they want the more direct connection with the owner and they feel they get that kind of service only through a listing agent. As a matter of fact, I have had many buyers request the listing agent only and will go from listing to listing looking for the listor for each listing to work with them. That means that some buyers will be working with a many as 6 agents, simply because the buyer thinks they are getting the best and most accurate information regarding the property they are viewing!

Now, I  do have a choice as to how I will work with a buyer, but unless they insist upon buyers agency, I can't make them request buyer agency! Besides, buyers in most cases want to feel that they can use other agents if they are not getting the right help from the one they are working with---buyers seem to to like variety, both in looking at properties and in the agents they work with and I am totally willing to let them have that postition.

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) almost 7 years ago

Lots of comments on your post and not surprising as it raises an interesting question. But in this market (and with the market being the way it has been for so long), the number doesn't sound that far off. Investors deal directly with listing agents in many cases, developers are aggressively marketing directly to clients, many home buyers "think" they'll get a better deal by working directly with the listing agent - it all adds up. Everyone is trying to find the best deal and so they think "cutting one participant out of the equation" is going to provide that...even though that's not true, it guides how people think and act.

Posted by Charlie Dresen, Steamboat Springs, CO e-Pro (Steamboat Sotheby's International Realty) almost 7 years ago

Wow what an interesting number.  The other 49 comments have about covered everything I would have said.  I'm really surprised at the amount of people who purchase without representation.  I think a lot of people think of home buying like buying a car and don't realize how big the purchase is and how important it is to get it right and make an educated decision. 

Posted by Kim Boekholder Utah Real Estate, Broker, Results Real Estate (Results Real Estate 801.580.5624) almost 7 years ago

Interesting statistic..

 

 

 

 

 

Posted by George P. Cruz Sr., PSL FL CDPE, TRC, CIPS (DR Horton) almost 7 years ago

Donna, I'm surprised the number is so low as well. Next week I am going to do a post called "Why It's a Good Idea to Use a Buyers Agent." :)

Posted by Lynda White, Admin. Mgr., Keller Williams Realty (Bluegrass Homes & Farms Realty, Agent Know How) almost 7 years ago

Wow, Lots of opinions as to why the number is so low. I'm surprised so many people would work with a buyer who just goes from listing agent to listing agent. I'll refrain from giving my direct opinion on that situation.

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) almost 7 years ago

Why is it that only 60% of buyers used their own representation?  From the comments, it's clear that agents don't fully understand agency, so why should we expect the public to be any different?

89% used agents. 60% used an individual buyers agent.  So that means that 39% of buyers either used the listing in a dual agency situation OR they used the listing agent with no representation to them at all.

And this is where agents seem to get totally confused.  As a seller's agent, I can show, and sell, the property to a buyer without representing them at all.  Simply opening a door for a buyer does NOT automatically make you a buyer's agent

Posted by Roger Johnson, Realtor - Hickory NC Real Estate (Hickory Real Estate Group) almost 7 years ago

I don't typically work with buyers, so I send them off to a buyer's agent.  I find people telling me that they will involve their agent once they find a house.  I don't get it...

I do have an investor that I tell I have sold 2 of my aged listings this year.    He is the only buyer that I have sold houses to this year.

Posted by Roger Newton (Roger Newton Real Estate) almost 7 years ago

The only bright spot in all this blight of major websites selling spots to agents with deep pockets is that it is getting harder and harder to actually FIND the real listing agent.  So many end up going the buyer agent route even though their primary intent was to  go through the listing agent.  Way too many people  still think they are entitled to a "cut" of the commission pie when they try to go directly through the listing agent.

Posted by Ruthmarie Hicks (Keller Williams NY Realty - 120 Bloomingdale Road #101, White Plains NY 10605) almost 7 years ago

Although having an Internet presence has allowed me to sell more of my own listings now than ever before, it is nowhere near 40%.  In fact, with the Buyer's Market I haven't been as active in getting listings because I was frustrated dealing with sellers, and I've always been a listing agent.  I still have a good inventory of listings, but I wasn't going after them.  That will change in the coming year and I'm going to hit those expireds and fsbo's hard as I'm seeing signs of a little better market in my area.

As far as investors purchasing through reo companies, good luck in my area.  Most of them are too busy to be showing their own properties and they don't answer their phones.  I've had buyers tell me that the reo listing agent told them to find their own agent as he didn't show his listings.

I'm thinking that maybe respondents were confused with what a buyer's agent really is, especially if they didn't sign any kind of agreement.  For those that don't sign BAA's, they don't realize they are actually working with a buyer's agent that has a fiducicary duty to them.  Or there might be pockets of areas where dual agency is the norm, some here on AR write as if it is in their location.

Posted by Judy Orr, SW & Near West Chicago suburbs (HomeSmart Realty Group) almost 7 years ago

Good morning Donna. There is a new blog entry up at NAR Research's "Economists' Outlook" blog that discusses home buyers and their use of a real estate agent in the transaction. From the 2011 Profile, 89 percent of recent buyers purchased their home through a real estate agent or broker. In 2001, only 69 percent of buyers purchased through a real estate agent or broker. The full blog entry can be found here:

http://bit.ly/tZOpnM

Posted by NAR Research almost 7 years ago

TJ at NAR, Yes, I understand the numbers have gone up since 2001, but even in the write-up on NAR's page, it still shows only 60% of buyers had their OWN representation, not going through the listing agent.

What am I missing?

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) almost 7 years ago

I agree with Roger,  Showing someone a listing doesn't make you a buyer's agent but you could get in to trouble by "acting" like a buyer's agent without a signed BA Contract.  You could lead the buyer to believe he/she is being represented.

Posted by Anonymous almost 7 years ago

Donna,

It's amazing that buyers will plow in and be unrepresented. I believe that the stats may be a bit misleading. I don't believe that many buyers use the listing agent to sell them their home. It must be taking new homes sales into consideration where the salespeople don't have to be licensed; at least here in Texas.

Posted by Randy & Nancy Selby (The Woodlands,TX Connect Realty.com) almost 7 years ago

The only way this is going to change is through legislation by state. In California it is legal to "double-end" a listing. Until dual agency is illegal, most buyers will think they are getting the better deal by going directly to the listing agent. 

I've observed my buyer clients already had an understanding that it is in their best interest to work with an agent who represents them and so they chose me to be their agent. It falls on agents to educate the public on this point.

Posted by Pamela Seley, Residential Real Estate Agent serving SW RivCo CA (West Coast Realty Division) almost 7 years ago

I agree the NAR Should educate Buyers about the need for representation of thier own.  However, I think the large real estate firms might not like that, and they run the NAR.

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) almost 7 years ago

The blog post just looks to shed some light on the 40% figure. While 29 percent of buyers did not have an explicit “buyer only” arrangement that was oral or written, they could have still used a buyer’s agent. The buyer’s agent could have been the listing agent to the home the buyer bought or, while the buyer did not have the arrangement, they might have purchased a home the buyer’s agent was not the listing agent to. Chart 4-6 only addresses whether the representation agreement was explicit or not. Chart 4-6 does not address if the buyer bought through the listing agent.  In fact, as the chart notes, 11 percent simply did not know. Just wanted to mention that the 40% figure may in fact not be so high.

Posted by NAR Research almost 7 years ago

I believe the figure is close to right. I have sold 10 of my own listings this year and 6 I had both sides. also when I get calls on property you dont know how many times I try to get them to let me help them and they say we just call whos name is on front of the home. Of course you cant say to them well I can negotiated better then the listing agent because your the listing agent they are calling now.

Posted by Joel Jadofsky, One of the Top Realtors in Panama City Beach Area (Keller Williams - homes for sale - Florida - Gulf - Beach ) almost 7 years ago

I have been quite uncomfortable working both sides of transactions. I am always nervous I will say something to one side that I shouldn't disclose. Maybe overly protective of the relationships. I wont say I don't enjoy commissions from both sides of a transactions and in some situations it is so much easier to work both sides. 

Another question? Do listing agents call potential buyers back more quickly than buyer's agents? It sure would appear that way in my most recent experience. 

Posted by Randy DeLaMare, Helping friends Realize their Real Estate Dreams (Realtypath LLC) almost 7 years ago

The advantage to using the listing agent is that they know the property!  The downside to that is when the listing agents never go to a showing!

Posted by Anonymous almost 7 years ago

Interesting, yet consumers will do extraordinary things that are out of anyone's control. I'm not concerned about national statistics, just my area, so I focus on the statistics that affect my business plan.

Posted by Kimo Jarrett, Pro Lifestyle Solutions (WikiWiki Realty) almost 7 years ago

That is a really scary statistic.  What behooves me is the fact that it is free to use a buyer's agent to protect your interests!  It can't get any better than that!

Posted by Jennifer Chiongbian, Real Estate Broker - NYC (Specializing in all types of Manhattan apts & townhouses) almost 7 years ago

Hi Donna - As many times as we have written about the importance of buyer represention, I think so many buyers still don't understand it.  It looks like our job of spreading the word is never done!

Posted by Peggy Chirico, REALTOR® 860-748-8900, Hartford & Tolland County Real Estate (Prudential CT Realty) almost 7 years ago

WOW! Locally that number is much smaller. I meet many people at my open houses that are not working with an agent, most of the time because they are not yet serious about buying. Those that are serious about buying are more than willing to give me their contact information so I can register them on my website to receive automated email notifications of new listings that come on the market. When a new listing comes up they are interested in we set a time for me to show them the house and the relationship continues to strengthen.

Posted by Theresa Bonin (RE/MAX Valley Properties) almost 7 years ago

Good grief.....I just don't get it....???

Other than those who (wrongly) think there's no benefit to having an agent who is working solely on their behalf, and (in my opinion) foolishly decide to work with the listing agent.....I cannot figure out where those numbers are coming from....???

Bottom line - buyer agents MUST do a better job of explaining the process and ALL the reasons why the buyers should work with an agent who has their back.

Definitely a thought provoking post - thanks!

PS Do you miss Dallas???? Hope all is well in Austin :0)

 

Posted by Edith Schreiber, Dallas Area Real Estate (Luxury Homes, Move Up Buyers, 1st Time Homebuyers, New Construction) almost 7 years ago

Hi Donna,  Not sure how the math works there but buyers are my biggest frustrations:

Why I Fired a Cash Buyer!

Posted by Bob Miller, The Ocala Dream Team (Keller Williams Cornerstone Realty) almost 7 years ago

Amazing, I had not seen that statistic. Who is looking out for those buyers best interest? Can't tell me it is the sellers agent...

Posted by Liane Thomas -Top Listing Agent, Bringing you Home! (BROKER Allison James Estates & Homes BRE 01885684) almost 7 years ago

Can't imagine these statistics are correct. Definitely not what I've seen either recently or ever. I'm with you in that I've only had a couple listings in my career where the buyer didn't want to be represented. I can see how buyers are unrepresented with new construction, but really can't buy the stats when we're talking about the rest of the market

Posted by Aaron Hofmann, aka Mr. Smyrna Vinings (Atlanta Communities) almost 7 years ago

Those are interesting numbers. Double-end transactions are not a huge portion here. A lot of agents don't use the buyer-broker agreement or explain the relationship to their clients. I sit down and go over all of that with my clients and have a good ratio of closing them. We are responsible to educate our clients.

Posted by Sylvie Stuart, Home Buying, Home Selling and Investment - Flagsta (Realty One Group Mountain Desert 928-600-2765) almost 7 years ago

I just took 20 minutes and ran the market intelligence / stats on the Denver metro area, I dont know if we have done a better job of educating the public as an industry locally or if our buyers are just "smarter" than the rest of the USA, either way, that NAR stat isnt even in the right ballpark (for Denver).

Did NAR get their results by "survey" or did they get it by actual transactional statistics?

Here are Denver metro actual transactional statistics from 2007 to present. (2011 is only Jan1-Nov30)

Percentage of deals where a Buyer Broker/Buyer Agent was used.

I took the total sides (con and res) and divided by the total # of sides where the selling broker ID was different than the listing broker ID.

2007 = 88.653%

2008 = 90.75%

2009 = 93.598%

2010 = 94.23%

2011 = 95.475%

I think there is only one place where the 60% might hold true and that is on New Construction sales. Otherwise NAR isnt even CLOSE to the Denver market. We almost always (95.475%) have a buyer's broker or buyer's agent on every deal here.

Posted by Jayson Holland, Jay Holland (Listings.com) almost 7 years ago

I have to agree w/Jayson w/o running our local stats I would say that more times than not there is a buyer's agent involved. There are a fair number of times where the listing agent gets a double end deal and occasionally we see a non-member deal, meaning the buyer chose no representation. I think buyers sometimes feel as if they are smarter than an agent and can do this themselves. However, if the buyer were paying for their agent I think we would see that number drop, buyer's see the value in a buyer's agent because they are not paying for their representation.

Posted by Jamie R. Bell, Your Central CT Realtor (Bell Realty Group at Berkshire Hathaway HomeServices NEP) almost 7 years ago

I keep on wondering myself what's going on in their minds when they try to buy with listing agent or do not have any representation.  This is very sad that NAR and local realtor organizations are not doing more to help general public understand the need of professional representation. 

Posted by Violetta Polyakov, Broker/Owner (Florida Home Consulting - Мы Говорим По Русски) over 6 years ago

I feel bad for those buyers, because it's probably costing them money to not be represented exclusively, but it's not all that surprising.  It all boils down to a lack of knowledge, and NAR should do more to educate the public. 

I've been a realtor for 10 years, and it seems almost crazy to me NOW that a buyer would not use an agent to represent them.  HOWEVER, when my wife and I first started looking for a home before I was in real estate, we didn't get a Realtor because we didn't want to "PAY" for one.  So, we drove around neighborhoods ourselves and called listing agents or looked at flyers for more info.  I had NO CLUE agents were paid by the seller, and as a 1st time buyer you wouldn't know, unless someone told you.

I have a free report, "How Realtors get paid" that I give to 1st time buyers.  I don't know that it makes any difference since I've already made contact with them, but I give it out anyway.  It needs to go out to the public.

Posted by Matt Robinson, www.professionalinvestorsguild.com (Professional Investors Guild) over 6 years ago

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