More Agents Work for HomebuyersPosted by Emily Ray-Porter on Friday, November 16th, 2007 at 11:56am.
08:16 AM CST on Friday, November 16, 2007
In many neighborhoods, it's a homebuyer's market.
So who's helping buyers get the best deal?
Traditionally, real estate agents represent the seller and are charged with getting them the top price for their home.
But a growing number of agents – spurred in part by current market conditions – are crossing the street to work exclusively for the buyer.
"It has always been very important, in my opinion, for a buyer to have his own representation," said Dallas real estate agent Sally Snyder. "But now that the market has turned, it is even more important.
"Since I've been an exclusive buyer's agent for over 10 years, this is the first time it has really been a buyer's market," she said.
Ms. Snyder and other buyer's agents say they can help their clients navigate a turbulent housing market and get the best buys.
"There are many sellers, and their agents, who still believe they can get the higher prices that we have known over the last few years," she said.
"It is my belief that a buyer should know exactly what the homes are actually selling for, including any seller incentives, which I am certain a traditional agent, especially the seller's agent, will not provide," Ms. Snyder said.
Almost 80 percent of buyers use an agent to help buy a house. But only 15 percent of recent buyers surveyed this year by the National Association of Realtors said they compensated an agent to represent them.
In most cases, the buyer's agent is compensated by the seller or the seller's broker in the real estate deal.
Some buyer's brokers charge upfront fees, which are reimbursed at closing.
Buyers expect a lot of service from their brokers.
Almost a quarter say they expect an agent to negotiate purchase terms for them and help decide how much to pay.
With housing prices falling in many markets, that's become a tougher job.
"It takes knowledge and expertise to convince sellers that their property may be overpriced and/or in need of repairs, and a buyer's agent has that experience," Ms. Snyder said.
And there are plenty of houses to chose from.
Nationwide, there are more than 4 million homes on the market – more than double the inventory five years ago.
In the Dallas-Fort Worth area, about 47,000 pre-owned homes and almost 10,000 new houses are available, recent surveys suggest.
Real estate agents say they are paying more attention to buyers' needs. property may be overpriced and/or in need of repairs, and a buyer's agent has that experience," Ms. Snyder said.
Arizona Realtor Curtis Hall said he's giving buyers more service than they'll get from traditional agents.
"It's going to cost you a little bit more to work with me than many other agents," Mr. Hall said at the National Association of Realtors annual meeting in Las Vegas. "I have to impress upon them why they want to hire me."
Mr. Hall said he provides detailed market insight and goes the extra mile to evaluate properties to protect his buyers.
"We are going to have inspections all over the place," he said.
"The buyers today think they already have all the information – they are on the Internet," Illinois agent Lynn Madison said. "It's really important that we show them that we are going to bring something to the table."
Along with finding a house, polls say, buyers also want help with things such as doing paperwork, deciding how much house they can afford and finding financing.
Even so, many homebuyers don't use their own agent but rely on representatives for the seller in making the purchase.
Real estate agents who work for the seller have a legal responsibility for them.
So how can seller's agents fairly handle both sides of the deal?
"If you say there are not conflicts of interest, you are kidding yourself – they are there," said Longview Realtor Rhonda Hamilton.
In today's market, buyers need more help comparing properties and advice on how to evaluate potential neighborhoods, Ms. Hamilton said.
"Finding the property is the tip of the iceberg in what we really do," she said.
Competition among real estate agents is increasing. While nationwide home sales have fallen about 20 percent since 2005, the number of people in residential sales is at a record high 1.36 million.
"The Realtor membership over the last five years has grown by about a half-million," said Lawrence Yun, National Association of Realtors' chief economist. "It's a fiercely competitive market."
There is now one real estate agent for every working American adult, Mr. Yun's figures show.
In the contest for business, Dallas real estate agent Steve Ritchey said, exclusive buyer's reps can be more focused on their clients' needs.
"We do not need to sell a client on a certain home or neighborhood," Mr. Ritchey said. "We don't have to spend time or money marketing homes.
"All of our time and effort goes to finding and buying the best home at the best price for our buyers."